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If an action is brought against the researchers, I predict it will be a (likely unsuccessful) insider trading case, not a market manipulation case. I don’t see

by dsacco 9y ago

If an action is brought against the researchers, I predict it will be a (likely unsuccessful) insider trading case, not a market manipulation case. I don’t see any market manipulation here[1], considering activist investors have set a precedent for make hyperbolic statements which are mostly unchallenged, so long as there is a nontrivial kernel of truth. Material, nonpublic information is of course not illegal to trade on, on its own. It’s not generally illegal to trade on unpublished vulnerabilities. But it’s routine to be forcibly entered into a confidentiality agreement as part of the process of reporting a vulnerability. For example, reporting a vulnerability through Bugcrowd or Hackerone would immediately make it illegal for you to trade on the knowledge of the vulnerability. I assume the researchers were savvy enough to report the vulnerability in such a way that did not enter them into a confidentiality agreement. That said, AMD may lean on the widespread commonalities of how many responsible disclosure processes do work with respect to confidentiality in order to try and establish a precedent. They’ll make arguments about reasonable disclosure windows before publication, etc. This is, to my eyes, the best case for someone trying to bring a case forward. If the researchers implicitly agreed to a confidentiality agreement (for example, if the page with security contact information has “browsewrap” terms and conditions, or if buying an AMD product at all has such terms), it will be messy, but they’ll be probably fine, I think. However, if they actually reported the vulnerability through a medium that explicitly forces confidentiality, I think they’re actually screwed. __________________________ 1. Legally speaking. I decline to comment on ethics.

otakucode 9y ago
Going strictly by the letter of the law what you say makes sense. But there are other factors at play here. These are "computer nerds" taking aim at an American company from outside the US. I do not think they will find many willing to practice the restraint we would see if we were dealing with a typical wealthy American white collar criminal. Such behavior is normalized in some circles, but it is still seen as aberrant for any 'outsiders' to engage in the same behavior.
- dsacco 9y ago
  > These are "computer nerds" taking aim at an American company from outside the US. I do not think they will find many willing to practice the restraint we would see if we were dealing with a typical wealthy American white collar criminal. Such behavior is normalized in some circles, but it is still seen as aberrant for any 'outsiders' to engage in the same behavior. 1. That they are "computer nerds", in your words, is inconsequential. Their in-group will not be a deciding factor, for better or worse. This isn't high school, and the SEC has a minimum level of professionalism it does adhere to. 2. Your characterization is, more broadly speaking, not well-founded. Activist investors are not, as a rule, white collar criminals. in fact they're not typically any sort of criminal. The SEC doesn't need to practice restraint or extend arbitrary leniency (something the SEC is not known for, for any group), because the activity tends to only rarely overstep legal boundaries. 3. This behavior is not seen as aberrant for any outsiders, and it's not normalized to only some group in "Big Wall Street." For example, I'm an outsider to activist investing, and I find nothing aberrant about it at all. In fact I think of it somewhat positively.
  - otakucode 9y ago
    I think you misinterpreted what I was talking about. Either that or you define 'activist investors' very differently from how I define it. What these people are doing is not 'activist investing.' They are providing disinformation, engaging in active and intentional deception towards the goal of destroying a company in order to profit. They are not uncovering wrongdoing or fraud. They are not doing due diligence and profiting from material information. That is not criminal, obviously, and is to be lauded! If you engage in willful intentional deception, you are not an activist investor. You would be engaging in fraud and illicit market manipulation. I find it very bizarre that you would claim these malicious actors as activist investors. Most of the rest of your complaints with my statements seem to stem from your notion that I would do the same. I do not.

by dsacco 9y ago

otakucode 9y ago

Going strictly by the letter of the law what you say makes sense. But there are other factors at play here. These are "computer nerds" taking aim at an American company from outside the US. I do not think they will find many willing to practice the restraint we would see if we were dealing with a typical wealthy American white collar criminal. Such behavior is normalized in some circles, but it is still seen as aberrant for any 'outsiders' to engage in the same behavior.

dsacco 9y ago
> These are "computer nerds" taking aim at an American company from outside the US. I do not think they will find many willing to practice the restraint we would see if we were dealing with a typical wealthy American white collar criminal. Such behavior is normalized in some circles, but it is still seen as aberrant for any 'outsiders' to engage in the same behavior. 1. That they are "computer nerds", in your words, is inconsequential. Their in-group will not be a deciding factor, for better or worse. This isn't high school, and the SEC has a minimum level of professionalism it does adhere to. 2. Your characterization is, more broadly speaking, not well-founded. Activist investors are not, as a rule, white collar criminals. in fact they're not typically any sort of criminal. The SEC doesn't need to practice restraint or extend arbitrary leniency (something the SEC is not known for, for any group), because the activity tends to only rarely overstep legal boundaries. 3. This behavior is not seen as aberrant for any outsiders, and it's not normalized to only some group in "Big Wall Street." For example, I'm an outsider to activist investing, and I find nothing aberrant about it at all. In fact I think of it somewhat positively.
- otakucode 9y ago
  I think you misinterpreted what I was talking about. Either that or you define 'activist investors' very differently from how I define it. What these people are doing is not 'activist investing.' They are providing disinformation, engaging in active and intentional deception towards the goal of destroying a company in order to profit. They are not uncovering wrongdoing or fraud. They are not doing due diligence and profiting from material information. That is not criminal, obviously, and is to be lauded! If you engage in willful intentional deception, you are not an activist investor. You would be engaging in fraud and illicit market manipulation. I find it very bizarre that you would claim these malicious actors as activist investors. Most of the rest of your complaints with my statements seem to stem from your notion that I would do the same. I do not.