Jump to content

Muddied SINO Brock


Guest davidwoo
 Share

Recommended Posts

Guest davidwoo

It's funny or maybe I haven't seen the mention of it, but nobody has asked Brock if his research is his own or someone else's juice.  

 

It is common enough practice for hedge funds to back certain journalist and research shops, not with money per se, but instead with the actual research or story.  The reporter or small research shop gets a product, information, and the hedge fund gets the release of this information in a market moving form.  Usually the sign of this is a research firm or reporter with a story that is too much for them to handle.  That is, way over their ability to analyze from scratch.  It's fed to them.  Usually the story is true, and many times it's sourced from inside information.  Though occasionally it's good solid analytic research on the part of the hedge fund.  This last variant is questionable because it is undisclosed passing of the information, but it is not abhorrent because the information isn't material non public inside.  

 

The more nefarious type occurs when hedge fund "A" gets an inside tip of fraud from investment banker "B" and hedge fund "A" releases this info to journalist/small research shop "C."  The tip of fraud is true and real.  It should have been the duty of the banker to disclose this, but he is more concerned with whatever fees he is to make.  Hedge fund "A" knows it legally cannot trade on this information, but does so anyway, because it conveniently convinces itself that it discovered a fraud and it is smart.  Journalist/small research shop "C" is usually too stupid to understand what's going on and actually convinces themselves that being handed information from an hedge fund is genuine muckraking.  Some are smarter and understand their role, and apparently they get to profit not only with reputation nowadays.  

 

There was a fictional company a while back called "Ronne" that orchestrated some real dubious financial structures with its investment banks.  The bankers didn't care because this business paid so much, but they did care enough to pass the existence of these dubious transactions on to prominent hedge fund friends.  The prominent hedge fund friends realized they shouldn't trade on this information but they did so anyway, after all, they told themselves, they are smart at uncovering and analyzing fraud.  Having built a short position in "Ronne," the prominent hedge fund that's convinced itself that it's really smart at analyzing fraud feeds the information to Mr. Irish McClean, the squeaky reporter at "Gobs and Gobs" magazine. You guys know the fictional story.

 

Anyway, the really interesting part of this is that trading on material non public information handed to you is legal if said information is about fraud.  How is this you ask?  Why, two Wongs can make it white.  

 

So the question I have for the former UFC champion is this:  Who gave you the steroids?  

 

DW

 

 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...