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Seeing as CTS-Lab's CFO also founded a hedge fund you're probably on the right track. >Yaron co-founded CTS-Labs in 2017, and previously served as an intellige

Seeing as CTS-Lab's CFO also founded a hedge fund you're probably on the right track. >Yaron co-founded CTS-Labs in 2017, and previously served as an intelligence analyst in the Israeli Intelligence Corps Unit 8200. He is also the founder and Managing Director of NineWells Capital, a hedge fund that invests in public equities internationally. He holds a B.A. and M.A. from Yale University.

tyfon 9y ago
Basically a follow the money situation. Could something like this be considered inside information? Or is it legal to actively manipulate stock prices to ones benefit in this way?
- matt4077 9y ago
  No. Doing independent research is not “inside information”. This is actually pretty close to how a market is supposed to work. It’s also not market manipulation to publish factual information or opinions. Only knowingly publishing false information would qualify.
- dsacco 9y ago
  > Could something like this be considered inside information? No, illegal insider trading refers to trading on inside information when you have a confidentiality agreement or a fiduciary duty. Information asymmetry is insufficient (or else it would be virtually impossible to profitably trade at all). > Or is it legal to actively manipulate stock prices to ones benefit in this way? The way you're presenting this is a false dichotomy. It's not "manipulating" stock prices except insofar as people broadcast news all the time which alters stock prices. Strictly speaking, it's not market manipulation if it's true. If it's false, it can be, which is why you really try not to do it unless it's true.
  - tyfon 9y ago
    Might the latter also depend on how you present it? As far as I can see this is only an exploit of secure boot if you are already on ring 0 level auth. Making a whole webpage with lots of graphics and whatnot, sending press releases all over and in general present it like a security flaw on the level of meltdown seems .. false? Probably court level material.. In any case it seems to have backfired as the stock is up.
    - dsacco 9y ago
      I think the difference in facts you're talking about is a difference of degree, not category. In other words, it's not plainly false, there certainly is a vulnerability, it's just perhaps exaggerated. I could see a case being brought against the researchers on those grounds, but I'd be really surprised if anything came of it.
      - kbenson 9y ago
        It could be interesting. Some of the flaws presented require you flash your bios, if I understand correctly. They are included with what are likely real flaws, but maybe it's enough for a case of misleading the public in part. To me it seems sort of like saying Ford engines have a tendency to blow up, but only after you've overwritten some engine firmware. By itself, not much to talk about, but when attached to something that has indications of being used to make money through stock changes, maybe is more likely to be looked at unfavorably by the SEC?
    - ek750 9y ago
      Hopefully someone with more experience can answer this, but could the stock be going up due to high short interest? Maybe not technically a short squeeze (https://en.m.wikipedia.org/wiki/Short_squeeze https://en.m.wikipedia.org/wiki/Short_squeeze) but related?
  - noobermin 9y ago
    What if it's not false but misleading? That sounds closer to what they are doing here. Sure they included a ridic disclosure agreement that you apparently agree to have read if you continue to read their webpage, and it says something along the lines of "this is our opinion". It feels slimy and gross.
    - dsacco 9y ago
      "Slimy" and "gross" are not nearly sufficient for either insider trading or market manipulation. I don't particularly like the way these researchers are acting either, but that's actually because I don't like vulnerability impact being exaggerated and over-hyped. The other stuff doesn't bother me too much. If the news pushing a stock price is so misleading that it's categorically different from the truth, then I could see a case for market manipulation being brought against them. But I doubt that will happen, because unfortunately people have broad latitude to portray vulnerabilities however they'd like as long as they're convincingly authentic.
      - noobermin 9y ago
        I was just relaying my feelings in that last bit. But the misleading bit in my comment specifically refers to the fact it's an exaggeration as you put it. So you can flash a bios and make it do nefarious things: that is a true statement but it's hardly a "security flaw" and almost not even too surprising. They are however taking a flaw and spinning it out to be the massive security flaw which it isn't. I guess that's my question. If you take a true statement and put it out with connotations that it's actually a terribly thing and worse than it is, just being "true" doesn't matter. Stupid analogy, say you go to a bakery and buy bread, then it goes stale in two hours or so by the time you get home. Then you go and write a negative yelp review that this bakery is terrible at baking and they sell subpar bread. You just don't know that the bakery doesn't bake in preservatives that bread you buy from the supermarket does. And it certainly isn't like the bakery is selling spoiled/poisoned bread or selling rocks painted to look like bread loaves.
- chadash 9y ago
  To add to the other comments here, a recent high profile case of something similar was Bill Ackman shorting Herbalife. Basically, he shorted the stock and then went to the media with his research showing that he believed Herbalife to be a pyramid scheme. Ultimately, I believe he lost money on the whole fiasco, but it's not an uncommon strategy. The whole thing made the news after a particularly amusing exchange between Bill Ackman and Carl Icahn (who had the opposing view) on CNBC: https://www.youtube.com/watch?v=hCZRk1lL90Q https://www.youtube.com/watch?v=hCZRk1lL90Q. I worked on Wall Street at the time and I remember the entire trading floor at my bank was almost frozen as they were watching this live.
  - tyfon 9y ago
    I see.. So it could be a viable business to do research like this, short stock and then release the information. It just has to be a bit more damning than this as the stock price is actually up today! Seems a bit shady in any case if one were to do this in the same way as when companies pay researchers to make claims publicly that benefit the company like the process leading up to the banning of led in petrol etc.
  - gruturo 9y ago
    Regarding Ackman vs Herbalife, the old adage comes to mind: The market can stay irrational longer than you can remain solvent.

tyfon 9y ago

Basically a follow the money situation. Could something like this be considered inside information? Or is it legal to actively manipulate stock prices to ones benefit in this way?

matt4077 9y ago
No. Doing independent research is not “inside information”. This is actually pretty close to how a market is supposed to work. It’s also not market manipulation to publish factual information or opinions. Only knowingly publishing false information would qualify.
dsacco 9y ago
> Could something like this be considered inside information? No, illegal insider trading refers to trading on inside information when you have a confidentiality agreement or a fiduciary duty. Information asymmetry is insufficient (or else it would be virtually impossible to profitably trade at all). > Or is it legal to actively manipulate stock prices to ones benefit in this way? The way you're presenting this is a false dichotomy. It's not "manipulating" stock prices except insofar as people broadcast news all the time which alters stock prices. Strictly speaking, it's not market manipulation if it's true. If it's false, it can be, which is why you really try not to do it unless it's true.
- tyfon 9y ago
  Might the latter also depend on how you present it? As far as I can see this is only an exploit of secure boot if you are already on ring 0 level auth. Making a whole webpage with lots of graphics and whatnot, sending press releases all over and in general present it like a security flaw on the level of meltdown seems .. false? Probably court level material.. In any case it seems to have backfired as the stock is up.
  - dsacco 9y ago
    I think the difference in facts you're talking about is a difference of degree, not category. In other words, it's not plainly false, there certainly is a vulnerability, it's just perhaps exaggerated. I could see a case being brought against the researchers on those grounds, but I'd be really surprised if anything came of it.
    - kbenson 9y ago
      It could be interesting. Some of the flaws presented require you flash your bios, if I understand correctly. They are included with what are likely real flaws, but maybe it's enough for a case of misleading the public in part. To me it seems sort of like saying Ford engines have a tendency to blow up, but only after you've overwritten some engine firmware. By itself, not much to talk about, but when attached to something that has indications of being used to make money through stock changes, maybe is more likely to be looked at unfavorably by the SEC?
  - ek750 9y ago
    Hopefully someone with more experience can answer this, but could the stock be going up due to high short interest? Maybe not technically a short squeeze (https://en.m.wikipedia.org/wiki/Short_squeeze https://en.m.wikipedia.org/wiki/Short_squeeze) but related?
- noobermin 9y ago
  What if it's not false but misleading? That sounds closer to what they are doing here. Sure they included a ridic disclosure agreement that you apparently agree to have read if you continue to read their webpage, and it says something along the lines of "this is our opinion". It feels slimy and gross.
  - dsacco 9y ago
    "Slimy" and "gross" are not nearly sufficient for either insider trading or market manipulation. I don't particularly like the way these researchers are acting either, but that's actually because I don't like vulnerability impact being exaggerated and over-hyped. The other stuff doesn't bother me too much. If the news pushing a stock price is so misleading that it's categorically different from the truth, then I could see a case for market manipulation being brought against them. But I doubt that will happen, because unfortunately people have broad latitude to portray vulnerabilities however they'd like as long as they're convincingly authentic.
    - noobermin 9y ago
      I was just relaying my feelings in that last bit. But the misleading bit in my comment specifically refers to the fact it's an exaggeration as you put it. So you can flash a bios and make it do nefarious things: that is a true statement but it's hardly a "security flaw" and almost not even too surprising. They are however taking a flaw and spinning it out to be the massive security flaw which it isn't. I guess that's my question. If you take a true statement and put it out with connotations that it's actually a terribly thing and worse than it is, just being "true" doesn't matter. Stupid analogy, say you go to a bakery and buy bread, then it goes stale in two hours or so by the time you get home. Then you go and write a negative yelp review that this bakery is terrible at baking and they sell subpar bread. You just don't know that the bakery doesn't bake in preservatives that bread you buy from the supermarket does. And it certainly isn't like the bakery is selling spoiled/poisoned bread or selling rocks painted to look like bread loaves.
chadash 9y ago
To add to the other comments here, a recent high profile case of something similar was Bill Ackman shorting Herbalife. Basically, he shorted the stock and then went to the media with his research showing that he believed Herbalife to be a pyramid scheme. Ultimately, I believe he lost money on the whole fiasco, but it's not an uncommon strategy. The whole thing made the news after a particularly amusing exchange between Bill Ackman and Carl Icahn (who had the opposing view) on CNBC: https://www.youtube.com/watch?v=hCZRk1lL90Q https://www.youtube.com/watch?v=hCZRk1lL90Q. I worked on Wall Street at the time and I remember the entire trading floor at my bank was almost frozen as they were watching this live.
- tyfon 9y ago
  I see.. So it could be a viable business to do research like this, short stock and then release the information. It just has to be a bit more damning than this as the stock price is actually up today! Seems a bit shady in any case if one were to do this in the same way as when companies pay researchers to make claims publicly that benefit the company like the process leading up to the banning of led in petrol etc.
- gruturo 9y ago
  Regarding Ackman vs Herbalife, the old adage comes to mind: The market can stay irrational longer than you can remain solvent.