Thursday, November 25, 2010

Federal Prosecutors: Supply Line Leaks May Constitute Insider Trading

A new federal investigation is focusing on the legality of supply line leaks and their consequences on Wall Street. The poster boy for this would have to be Apple, around which an entire manufacturing and distribution channels has grown, and which is now too big to plug every leak — especially now that memetically propagating news magnifies every murmur into a clamor, for better or for worse. The subjects of the probe are some research firms that make it their business to know what's going on in, say, Shenzhen or Taiwan, where friends and industry experts dispense information that may or may not be confidential about such things as big new orders, equipment changes, and meetings with other companies. The feds say that at some point, these things must constitute insider trading. I say good luck drawing that particular line.


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