JP Morgan's Insider Trading How-To On Wikileaks

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."

Comments

Re:Not a "leak" ?

[esocid]

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.

Re:So what's the problem with insider trading anyw

[FusionDragon2099]

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.

Re:Not a "leak" ?

[Whiney Mac Fanboy]

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.

Re:So what's the problem with insider trading anyw

[evanbd]

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...

Re:The Fundamental reason this is legal

[pitchpipe]

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.