"This is akin to a production intern for Jim Cramer buying stocks that he knows Jim will talk about on his show that evening, to profit from any short-term pump from the exposure."
Is that actually insider trading?really not sure...
Is that actually insider trading?really not sure...
Yeah none of that stuff is in Jim Cramer's show lol
> There are studies depicting the market’s reaction to recommendations made on Cramer’s show. Notably, in January 2009, graduate students from the University of Pennsylvania published a study claiming that over time, the average next-day increase for a stock that Cramer recommended was 3% for the entire study sample, and almost 7% for smaller cap stocks. They proved through the use of electronic communication networks (ECN) that most trades came in after 7 p.m. ET, when "Mad Money" concluded.
> Another study conducted by Northwestern University, titled "Is the Market Mad?: Evidence from 'Mad Money'" and published in 2006, showed that the average cumulative return on Cramer’s recommendation was 5.19%, but, more important, almost all the increases were nullified within 12 days.
> Cramer recommends stocks with momentum, both positive and negative. His recommendations affect the price, with the impact reversing quickly, consistent with pricing pressure caused by viewers' jumping on Cramer's recommendations. Cramer's sell recommendations also affect prices, though the impact does not quickly reverse.
The key words are "material non-public information".
IF it is information and IF that information might make a material difference, it could be subject to insider trading.
IF that material information is time-sensitive, and it is not yet available to the general public, then I can assure you that it is subject to insider trading rules (as Nathaniel Chastain is now discovering to his detriment).
If such were not the case, then there would be queues of people wanting to work for free as interns at every financial wire service.
I can also report that a family member has worked at some major law firms (which do work for major corps & individuals), and they, and their family are specifically forbidden from trading in individual stocks without specific advance permission for each trade. This is to both avoid even the appearance of impropriety, and also just so everyone knows that if you break the rule and it ever comes up as a problem, you'll be fired in a New York Second [1].
[1] New York Second = the amount of time between the time a light turns green and the driver behind you hits the horn if you aren't already moving - considerably shorter than the standard International Atomic Time second.