Ho-ho-ho: "Lebed.biz/Jonathan Lebed is not a registered investment advisor or a broker / dealer. Lebed.biz/Jonathan Lebed does not recommend whether to buy, sell, or hold securities. All opinions expressed by Lebed.biz/Jonathan Lebed are not a solicitation to buy, sell, or hold securities. "
Could somebody summarize why what he did was illegal? I gave up after ~1.5 pages. If all he did was to give stock trading advice under false names, is that really illegal? I am actually surprised.
You're not allowed to spread rumours you know to be untrue or create a false impression of trading activity for the purpose of manipulating share prices.
Not quite. The departments which trade and the departments which write reports on companies are completely separate and firms have to maintain information barriers between them (aka Chinese Walls).
If a department was to write a report based upon a position they held, or if a firms trading arm traded based upon a yet unpublished report that another department had written, then in both cases the firms would likely be breaking the law.
Financial firms normally have information registers, so if you have people from either side of the information barrier discuss a company then that has to be recorded and that information is used to restrict the actions of the individuals involved. Passing restricted information over the barrier without registering it can be enough to lose your licence even if the information isn't used improperly.
However if you hold a position in a company you are perfectly free to go and promote your view of that company as long as you declare you're own interest. You're not allowed to pump rumours and there are specific restrictions on projections, but you can perfectly freely talk about why you think a stock is worth buying.
But as long as you don't know that they are untrue, you are allowed to say whatever you want? otherwise all those Apple bloggers might be on dangerous grounds.
(IANAL; but I have worked in the financial sector for 6 years and undergone compliance/financial legislation training)
Most Apple blogger are on safe grounds assuming they don't hold apple shares and aren't spreading the rumours for the purpose of moving the share price.
In general you are allowed to repeat rumours you believe to be true but you have to be very explicit that what you're repeating is a rumour.
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[ 3.4 ms ] story [ 33.1 ms ] threadIf a department was to write a report based upon a position they held, or if a firms trading arm traded based upon a yet unpublished report that another department had written, then in both cases the firms would likely be breaking the law.
Financial firms normally have information registers, so if you have people from either side of the information barrier discuss a company then that has to be recorded and that information is used to restrict the actions of the individuals involved. Passing restricted information over the barrier without registering it can be enough to lose your licence even if the information isn't used improperly.
However if you hold a position in a company you are perfectly free to go and promote your view of that company as long as you declare you're own interest. You're not allowed to pump rumours and there are specific restrictions on projections, but you can perfectly freely talk about why you think a stock is worth buying.
Most Apple blogger are on safe grounds assuming they don't hold apple shares and aren't spreading the rumours for the purpose of moving the share price.
In general you are allowed to repeat rumours you believe to be true but you have to be very explicit that what you're repeating is a rumour.