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JP Morgan's Insider Trading How-To On Wikileaks

Posted by kdawson on from the ten-bee-five-dash-one dept.

An anonymous reader writes "In an internal JP Morgan document published recently, Wikileaks exposes JPM's efforts to circumvent insider trading regulations, enabling their wealthy clients to profit even when others are losing. The document reads like a how-to and explains how to take advantage of SEC Rule 10b5-1, which has long been considered ripe for abuse. Now this abuse is publicly documented and will be hard to ignore."

9 of 246 comments (clear)

  1. Re:Not a "leak" ? by esocid · · Score: 5, Insightful

    It may not be confidential information but it is however informative about the prevalence of the sort of abuse that goes on with investing. You can't tell me that you were aware of such a blatant tool designed to aid with insider trading. It may be technically legal, but 100% unethical. And even more so for an investment firm to prepare a "how-to for dummies." I'm not sure how aware the SEC is of this problem, but that may get wind of it now if you weren't aware of it before.

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    Absolute power corrupts absolutely. indymedia
  2. Re:So what's the problem with insider trading anyw by FusionDragon2099 · · Score: 5, Insightful

    The benefit of insider trading is information enters the markets quicker. That is good for me. Except for the part where information won't enter the market, as inside investors benefit more from withholding inside information as it profits them.
  3. Re:So what's the problem with insider trading anyw by TheLink · · Score: 4, Insightful

    You want the Casino (or a favored player) to be able to know what the next cards are before other people at the table?

    If there are other Casinos around, nobody will want to play at your "Milton Friedman approved" Casino.

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  4. Re:The loophole by Creepy+Crawler · · Score: 4, Insightful

    Who said the lawmakers missed anything?

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  5. Re:Not a "leak" ? by Whiney+Mac+Fanboy · · Score: 5, Insightful

    I even doubt that Wikileaks made it public;

    Please point us to other places this document can be found online.

    I mean, they must have some kind of advertisement or at least a publicly available description of this service, no?

    All documents on Wikileaks were distributed somewhere, I don't see what your point is.

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    There are shills on slashdot. Apparently, I'm one of them.
  6. Re:So what's the problem with insider trading anyw by evanbd · · Score: 5, Insightful

    You're missing the point. The act of trading inherently gives away information -- the information enters the market through the trade records.

    The fact that this is so is easy to determine from careful analysis of stock markets. Whether that makes insider trading any more or less ethical is left as an exercise for the reader...

  7. The Fundamental reason this is legal by Dr+Reducto · · Score: 4, Insightful

    The fundamental problem is that the SEC made trading on insider information illegal, they didn't make "not trading" on insider information illegal, and that should never be made illegal.

    1. Re:The Fundamental reason this is legal by pitchpipe · · Score: 5, Insightful

      they didn't make "not trading" on insider information illegal, and that should never be made illegal.

      Maybe you didn't read how the whole thing works.

      They set up a trade to sell at such and such a date in the future. If they get hold of some inside information that is very bad for the company, they let the trade proceed. The SEC says it's OK because the sale was set up before the knowlege of the insider information. If all is A-OK with the company, they cancel the trade, and because there was no stock bought or sold, the SEC says it's OK.

      The scam is in the fact that the sale (or not) of the stock was influenced by insider information, but the SEC says it's OK whether they sell or no.

      Here is my bitch, because I don't have $BIGNUM to invest in individual securities and I also will probably not come into contact with insider info, it is inherently unfair. But more importantly, it lowers my confidence in the system, making me less likely to value this market over any other, maybe even value those markets more. I know that I'm just one guy, but if lots of people start to feel this way, then it devalues the securities that are traded on that market.

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      Look where all this talking got us, baby.
  8. If I may... by aleph42 · · Score: 4, Insightful

    If I may...

    You had the energy to read the pdf three times, and you sound pretty sure that you found a problem in the current version of the Wikileak page, based on factual and verifiable information... that's the perfect oportunity to edit that article!

    If you're not sure, "be bold" (a wikipedia guideline: http://en.wikipedia.org/wiki/Wikipedia:Be_bold): edit it anyway, but add some explanations to the discussion thread (actually, your slashdot post would be perfect for that).

    Remember, a wiki is that cool thing were a spotted mistake is a corrected one!

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    Don't take my posts literally; it's just code to control my botnet.