Hacker News Reader

Comment by briandear | Hacker News Reader

I wonder how many CR editors shorter Tesla stock before this was published. It wouldn't even be considered insider trading. I don't really put much stock in CR, unfortunately, the markets did -- quite unfairly actually since most folks buying Teslas aren't doing comparison shopping using CR.

View on HN

The number is zero. Any more than that would be a serious scandal--can't imagine that would be legal. Market manipulation is a pretty serious crime ever since the days of Jay Gould.

I'm not so sure, remember when it was perfectly legal for members of Congress and their staff to use information gained through their jobs to make stock purchases? I mean this was just a few years ago....

When it was? It still is, as far as I recall.

Is it your contention that Congress also created a special exemption for Consumer Reports? That seems like:

a. It credits CR with a lot more power than CR actually has.

b. We would have heard about it before now.

I'm not saying that consumer reports did anything wrong, but insider trading or not, it happens. And places we would not expect. Who would've ever thought that members of Congress in their staff would be allowed to do insider trading? Until someone pointed out that it was illegal some years back, it never crossed my mind. I assumed it was illegal

There is likely some confusion here. Look at this quote from the article:

"Just last month, the magazine awarded one version of the car — the all-wheel-drive Tesla Model S P85D — 103 points, a tally so high it broke the Consumer Reports road-test ratings system."

So last month's issue is published, hmm, where do you go from here, up or down? That's the time you buy into a short because you know the next news can't possibly be as good.

Its not insider trading if you get your short position the week after last month's magazine comes out, yet its almost guaranteed profit.

It absolutely would be considered insider trading, as this report before its publication clearly falls under the definition of Material Non-Public Information, ie. any information that could reasonably be expected to affect the price of a security, and that hasn't been published yet.

You need a 'duty of trust' to a company to be an insider for IT purposes. There is 0 way a CR writer would have that.

A CR writer would absolutely have duties to CR. See https://www.law.cornell.edu/supremecourt/text/484/19 for an example of a journalist who was convicted in such a situation.

Reply on news.ycombinator.com