American regulators have declared war on insider trading
A whispered aside in a bar, an indiscreet remark in an e-mail—this is the stuff on which inside trading thrives. But Blue Bottle, a Hong Kong firm fingered on February 26th by America's markets watchdog, the Securities and Exchange Commission (SEC), showed more chutzpah. It netted $2.7m trading on information it had gathered by hacking directly into computers to view press releases before they were published.
This is not the most egregious insider-trading case of recent days. That accolade goes to a ring of 13 bankers and fund managers, including ex-employees of UBS, Bear Stearns and Morgan Stanley. Last week they were busted by the SEC for trading illicitly ahead of mergers and analysts' stock-tips. What started as a ruse to repay a $25,000 debt allegedly spiralled into a lucrative scam as colourful as it was criminal. Mobile phones were binned to cover their tracks and cash passed around in Doritos packets. Some say the bust was the biggest blow against insider trading since Ivan Boesky was jailed and fined $100m.
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