Apple analysts part of SEC probe?

“Has the ‘channel check’ become a criminal act?” Susan Pulliam asks for The Wall Street Journal.

“Wall Street analysts have been left bewildered in recent days, as federal prosecutors begin to home in on insider-trading cases that appear to involve routinely published information about public-company supply chains,” Pulliam reports. “Case in point: Apple Inc., one of the hottest stocks of the past year, for which an entire industry of well-known and obscure analysts and ‘expert network’ scramble to report every detail of the company’s undisclosed production plans.”

Pulliam reports, “The proliferation of such research raises questions about where prosecutors will draw the lines that define insider trading… A few weeks [ago], Rodman & Redshaw issued a report to clients that was picked up by a popular website that compiles such reports. ‘Rodman’s supply chain checks indicate that monthly iPad production volumes are not expected to exceed much beyond 2 million units into year end.’ The report went on to say that street estimates for Apple’s December quarter ‘may end up being a stretch goal.’ Apple shares dropped sharply on the news, closing at $308.03, compared to $316.65 the day before.”

Full article here

MacDailyNews Take: Nail ’em to the wall.

[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]

20 Comments

  1. Seriously?!? While I think analysts are off their collective nut most of the time and that they may sometimes try to manipulate Apple’s stock for their own gain, the government is going WAY to far. Busting them for using their research info is getting a little ridiculous. Admittedly, I don’t know too much about wall street (other than it can be the ugliest form of capitalism sometimes), but have we had enough control and intervention yet?!?

  2. If someone learns from an inside source, that abc inc is going to supply iPhone didly-woopers, then buys abc inc – that is insider trading. It is not fair to others who do not have privileged info.

    If they learn that Apple will increase iPad production to 200 million next year through insider information. Then trading would be illegal.

    Sounds reasonable to me.

  3. The government (and thus taxpayers) got fleeced by the Wall Street investment banks over the last couple years and we get criticism of channels checks? Seriously?

    There is no justice.

  4. Jmmx, I understand your reason, but how would you verify this and what really constitutes ‘insider trading’?

    If an analyst does research (let’s assume they do…), and he makes that information public, could that be insider trader?

    I’d say no, he does not use that info for personal gain, he uses it for public gain… That’s where I’d think the line is. Personal versus public.

    Same issue for journalists and press-freedom. Journalists are serving ‘the public’ and press-freedom is one of the most important parts of the constitution where news is gathered not for personal use, but brought out to inform the public.

    Can you classify an analyst as a journalist reporting financial information to the public?

    I’m sure you can uphold that part in court.

  5. “Seriously?!? While I think analysts are off their collective nut most of the time and that they may sometimes try to manipulate Apple’s stock for their own gain, the government is going WAY to far. Busting them for using their research info is getting a little ridiculous”

    This is not ‘research’ it’s insider information. All information should be public. They were trading on information no one else had. This is a good thing.

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