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U.S. Regulators Investigating Research Analysts Over 'Channel Checks'

Funny...
I had a feeling the so called term "channel checks" would get wider exposure
Something like the the so called "data points" often used by talking heads
Funny terminology we come up with in pop language
 
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gnasher729 said:
So if someone posts confidential information about Apple, they might be in trouble with Apple for a breach of an NDA, or for giving away a trade secret, but they cannot not be in trouble with the SEC for insider trading.
.... But if whoever published it had kept the information to themselves and bought or sold Apple shares based on the information, that would be insider trading.
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Wrong. If they (or relatives, or someone they have financial/market connection to) trade in advance of or in conjunction with the info being public then they are guilty of insider of trading. They can release the info too however, if they trade (or close associated ) at same time on it it is insider trading. Broadcasting to the public doesn't cover up the insider trading act. "I yelled stampede in a chat room right before I traded on insider info" is not a creditable defense.



No, Apple doesn't get any free marketing from this. The SEC is talking about someone who bribes someone in China to find out exactly how many iPhones Apple is building, and then not telling anybody but buying or selling Apple shares depending on the numbers. The public doesn't hear about it; no free marketing.
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No this isn't it. More along the lines that someone gets info and then sells the information to others and they trade. Still insider trading.
Again tossing a bone to the public by leaking it out in limited public media after preparing to trade doesn't negate the insider trading. There is some free marketing because the info resellers will be selling Apple along with the tip.

Neither is this just aimed at suppliers. Apple internal folks selling/leaking the information to "market analysts" is also insider trading. Telling a subset of folks before telling the public is wandering into insider trading zone.
 
Michael73 said:
I suppose in order to prosecute, you'd have to be able to prove intent and have a motive but even that might not hold up. If you're company has signed an NDA, then no matter who is leaking the information and for whatever reason is in violation and subject to prosecution.
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Actually, insider trading is illegal regardless of intent. It is even illegal to knowingly pass on inside information to a third party who trades on the information, even if the intermediary does not profit himself.
 
schmidm77 said:
People are too focused on insider trading from the angle that it is unfair, but the fact is that insiders being able to act on information they possess causes that information to be known by outsiders much faster than it would otherwise.
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What part of "insider trading is illegal" do you not understand? :rolleyes:
 
Gasu E. said:
What part of "insider trading is illegal" do you not understand? :rolleyes:
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Actually, this is a little interesting. I'm not in law, but we are required to get trained on insider trading every year. For the most part it deals with people inside a company divulging information not available to the public.

To my laymen's mind it seems like the FCC is expanding the boundaries.

Even without talking to anyone inside or looking at secret documents, it sounds as if I could be in trouble if I just counted boxes going in and out of a factory and traded on that information as that would not be public information. Publishing that information would not be a problem. Once it was public information everyone could trade on that information.
 
faith4more said:
This goes on with all companies and it should be stopped. Wall Street analyst have been able to do "legal" insider trading for years.
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Reminds me of what a relative said about insider trading; the only difference between a 'hot tip' and 'insider trading' is whether you're caught - the issue is made even worse if you try to catch people where some will place their money in a blind trust and insider trading can occur by proxy. The complexity of the issue really makes me wonder whether the best attack vector is fixing society up rather than addressing the symptoms.
 
neutrino23 said:
Even without talking to anyone inside or looking at secret documents, it sounds as if I could be in trouble if I just counted boxes going in and out of a factory and traded on that information as that would not be public information. Publishing that information would not be a problem. Once it was public information everyone could trade on that information.
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If you are counting those boxes from a place/position/location to which the public doesn't have access, then it's inside information and you're in trouble.
 
MacRumors said:
... No analysts or consultants have yet been charged with any wrongdoing, but the SEC is clearly interested in learning more about their tactics and business practices...
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Me too. I think the tech industry is awash in insider trading and other secretive information that Joe Q. Public can't access. Don't hold Apple blameless here either. Despite their renowned control on their employees and partners, if they like you, you can ride the pony and get in on some information and the cash. If they don't, they sue you. Go duplicity! Great legal team over there in Cupertino.
 
mccldwll said:
There's nothing wrong with information asymmetry as long as no insider is profiting from it.
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Not quite right. Nothing wrong as long as all the insiders ( and stockholders) are profiting from it.

There is a tension in when information about a public company should be made public. As long as the information is released to everybody at the same time there is no problem. The real problem with insider info leaks is that the leaks themselves are asymmetric. The information is not broadly disseminated. That is exactly why it is illegal and rightfully so.

"gets the info out quicker" is usually a bogus argument thrown out as a smoke screen to hide where the real asymmetry is. Almost all information releases that happen in a hap-hazard way will do so in a asymmetric fashion.

The other stark reality that is skips over is that no business can compete in a highly competitive market by constantly telling its competitors exactly what it is doing. Aggregate information about the whole market that covers all of the competitors has a more minimal effect because it has something on everyone. Tracking the whole channel isn't a problem. What is be tagged is cherry picking individual companies to make specific moves on non-widely distributed data on those companies.
 
mccldwll said:
There's nothing wrong with information asymmetry as long as no insider is profiting from it.
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That is true, if by insider you mean anyone with inside information, not just employees. Based on the little I know, you could be riding in an elevator and hear two executives from a company discussing an upcoming merger. If you trade on that information you could be prosecuted.
 
How well can SEC regulations reach to foreign nationals trading from overseas on information from their "associates" in China? There's a huge amount of foreign ownership of U.S. securities, and financial laws differ between countries.
 
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