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Much further in you are informed that this is basically what all of Wall Street does.
by hyperbovine 17y ago
Much further in you are informed that this is basically what all of Wall Street does.
- ig1 17y agoNot quite. The departments which trade and the departments which write reports on companies are completely separate and firms have to maintain information barriers between them (aka Chinese Walls). If a department was to write a report based upon a position they held, or if a firms trading arm traded based upon a yet unpublished report that another department had written, then in both cases the firms would likely be breaking the law. Financial firms normally have information registers, so if you have people from either side of the information barrier discuss a company then that has to be recorded and that information is used to restrict the actions of the individuals involved. Passing restricted information over the barrier without registering it can be enough to lose your licence even if the information isn't used improperly. However if you hold a position in a company you are perfectly free to go and promote your view of that company as long as you declare you're own interest. You're not allowed to pump rumours and there are specific restrictions on projections, but you can perfectly freely talk about why you think a stock is worth buying.