4 ms·

Can any legally informed HNer explain the probability of criminal prosecution? The article seems to imply that it is un certain that this is illegal, but to me

Can any legally informed HNer explain the probability of criminal prosecution? The article seems to imply that it is un certain that this is illegal, but to me it seems like this is insider trading at the very least and maybe something else (criminal). The article says on this: > There are disagreements as to whether or not this practice is illegal.

kasey_junk 13y ago
This is certainly not insider trading. Reuters insiders are not giving out information about internal Reuters information. They are giving out proprietary analysis/research about the economy (specifically employment). There is no law that says everyone needs to have the same access to this.
yummyfajitas 13y ago
If Steve Ballmer comes up to you and says "hey buddy, I'm retiring soon, better buy some MS since the price is going up", and you buy, that's insider trading. If I (unrelated to Steve Ballmer) tell you "hey, that guys getting old, he'll probably retire soon", that's not insider trading. Near as I can tell, the Reuters early release is firmly within the category of the latter. I can't see any reason why early release of private research would be illegal.
- lifeisstillgood 13y ago
  Is there a pricing page on the Reuters site that says "standard", "Two Seconds early" and "One hour early"? If not I suspect its illegal. Al Capone was done for tax evasion, cannot see why Reuters cannot be in breach of a Fair Trading / Sales Act :-)
  - kasey_junk 13y ago
    As the article points out, the contract clearly shows the 3 known levels data distribution times (2 seconds early, on time, 5 minutes delayed). If they were releasing it at other times it would most likely be a contract breach or some other civil matter. But that is a big if. All this article points to to prove that is a disgruntled employee and a Nanex study (all months old) that do not have any proof of early release.
    - Jacqued 13y ago
      This is not the customer's contract, it's the University of Michigan's contract. If the regular customers know that there are other more privileged tiers that impact the value of what they're buying, I guess it's ok. Otherwise, i think it might qualify as fraud
      - kasey_junk 13y ago
        These tiers are widely known about in the algorithmic trading community. There is marketing materials on Reuters site outlining the advantages http://thomsonreuters.com/machine-readable-news/ http://thomsonreuters.com/machine-readable-news/ and if you are event trading you certainly pay for this. If the 4th secret tier exists, that would be a bigger problem but there is no proof of that in the article. It is all speculation.
        aet 13y ago
        Where can I find tiers and pricing? Just curious..
        kasey_junk 13y ago
        I don't actually use their service, I assume pricing is available via a sales rep via their contact us page. If you want notice about the tiers, take a look under the "Suite Components" portion of the link I provided.
JackFr 13y ago
Insider trading requires material, non-public information about a publicly traded firm, which the Michigan Survey is not. Additionally, there are regulations which pertain to releases from the the Treasury and the Departments of Labor and Commerce which also would not apply to the Michigan number. The Michigan Survey is one (probably the most prominent) of a number of private surveys and data point the big banks, but also include things like National Association of Purchasing Managers Survey, LA Port Traffic, Mortgage Banking Association Mortgage Applications, American Institute of Architecture Billing Index (leading indicator of construction), and a host of others.
rayiner 13y ago
Zero. There's nothing illegal about it, because the information isn't insider information about the companies being traded, but rather information compiled by a third party (U of M) that just happens to have a lot of market-moving power.

kasey_junk 13y ago

This is certainly not insider trading. Reuters insiders are not giving out information about internal Reuters information. They are giving out proprietary analysis/research about the economy (specifically employment). There is no law that says everyone needs to have the same access to this.

yummyfajitas 13y ago

If Steve Ballmer comes up to you and says "hey buddy, I'm retiring soon, better buy some MS since the price is going up", and you buy, that's insider trading. If I (unrelated to Steve Ballmer) tell you "hey, that guys getting old, he'll probably retire soon", that's not insider trading. Near as I can tell, the Reuters early release is firmly within the category of the latter. I can't see any reason why early release of private research would be illegal.

lifeisstillgood 13y ago
Is there a pricing page on the Reuters site that says "standard", "Two Seconds early" and "One hour early"? If not I suspect its illegal. Al Capone was done for tax evasion, cannot see why Reuters cannot be in breach of a Fair Trading / Sales Act :-)
- kasey_junk 13y ago
  As the article points out, the contract clearly shows the 3 known levels data distribution times (2 seconds early, on time, 5 minutes delayed). If they were releasing it at other times it would most likely be a contract breach or some other civil matter. But that is a big if. All this article points to to prove that is a disgruntled employee and a Nanex study (all months old) that do not have any proof of early release.
  - Jacqued 13y ago
    This is not the customer's contract, it's the University of Michigan's contract. If the regular customers know that there are other more privileged tiers that impact the value of what they're buying, I guess it's ok. Otherwise, i think it might qualify as fraud
    - kasey_junk 13y ago
      These tiers are widely known about in the algorithmic trading community. There is marketing materials on Reuters site outlining the advantages http://thomsonreuters.com/machine-readable-news/ http://thomsonreuters.com/machine-readable-news/ and if you are event trading you certainly pay for this. If the 4th secret tier exists, that would be a bigger problem but there is no proof of that in the article. It is all speculation.
      - aet 13y ago
        Where can I find tiers and pricing? Just curious..
        kasey_junk 13y ago
        I don't actually use their service, I assume pricing is available via a sales rep via their contact us page. If you want notice about the tiers, take a look under the "Suite Components" portion of the link I provided.

JackFr 13y ago

Insider trading requires material, non-public information about a publicly traded firm, which the Michigan Survey is not. Additionally, there are regulations which pertain to releases from the the Treasury and the Departments of Labor and Commerce which also would not apply to the Michigan number. The Michigan Survey is one (probably the most prominent) of a number of private surveys and data point the big banks, but also include things like National Association of Purchasing Managers Survey, LA Port Traffic, Mortgage Banking Association Mortgage Applications, American Institute of Architecture Billing Index (leading indicator of construction), and a host of others.

rayiner 13y ago

Zero. There's nothing illegal about it, because the information isn't insider information about the companies being traded, but rather information compiled by a third party (U of M) that just happens to have a lot of market-moving power.