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From the article, it seems the information was flowing _from_ the reporter: > The feds allege that Peltz used disposable “burner” phones and encrypted apps to
by antrix 6y ago
From the article, it seems the information was flowing _from_ the reporter:
> The feds allege that Peltz used disposable “burner” phones and encrypted apps to communicate with a journalist, and that the reporter provided “material nonpublic information about forthcoming articles” which Peltz used to trade in the market “just prior to publication of an article about each company written by the reporter.”
- mannykannot 6y agoNews like this loses its value unless it is published immediately, so I would think the leaker is effectively in control of when it is published.
- jsemrau 6y agoTrying to wrap my head around what you are trying to say. Let's use some example. If you would know that Tesla's delivery numbers were a disaster (they weren't). Knowing that before everybody else would give you a chance to sell at a significantly better price than others.
- plouffy 6y agoYes, but if you know exactly when everyone else find out you can time your trade more easily.
- theturtletalks 6y agoCould an insider trader get information, not act on it, write an article about his scoop, and then make trades after the article's published? If the publication he writes on is obscure and not followed, is the information still considered public?
- Thorrez 6y agoSure, but that doesn't mean it "loses its value unless it is published immediately". Basically, the info has a certain amount of value, that doesn't really go down. If you pair that information with the knowledge of when it will be published, it goes up in value.
- mannykannot 6y ago> Basically, the info has a certain amount of value, that doesn't really go down. I was thinking of the value of the news to Bloomberg, which was mentioned in the article: At Bloomberg, scoops about deals are highly valued, because beating competitors like Reuters or Dow Jones helps to justify the high price of a terminal, which carries rich veins of data along with news, at a reported cost of around $24,000 a year. The terminals constitute the company’s core business. If the information is deemed important, then, as soon as Bloomberg is confident in the information's accuracy, it will publish. Once Peltz had a record of giving reliable tips, that would likely happen quickly. https://en.wikipedia.org/wiki/Scoop_%28news%29 https://en.wikipedia.org/wiki/Scoop_%28news%29
- Thorrez 6y agoThanks, that makes sense.
- jsemrau 6y agoI think it depends how this information will be distributed. If it will be syndicated, then you will know the limit already.
- mannykannot 6y agoI am not taking a position here on the proposition that Peltz needed to know when the information would be published in order to profit. I am pointing out that, even without being explicitly told by the journalist, he could be reasonably sure that publication would occur quickly, if at all. He could also be reasonably confident that it would be published, given that it is valuable information, and that Bloomberg had demonstrated its confidence in his leaks by publising earlier ones. The feds may well, of course, have independent non-circumstantial evidence of the journalist informing Peltz about when the information would be published.