Hey big run,
I'm always serious with good questions and yours is. In general, I think everyone should have equal access to information. Selective disclosure (as in the ANF case) gets into troublesome SEC areas. The ANF case was a case where the company itself allegedly selectively leaked to an analyst.
I do realize that someone with bucks can buy information, not from the company or insiders, but from so-called analysts. Although I don't like it, I don't see any legal violation here.
I'm not quite sure what you mean by "what goes on within these message boards". If you mean leaking a report to select individuals and then "publishing" it as a "news" item as a "disclosure" as opposed to an opinion, in my opinion this is an unfair, deceptive and manipulative tactic, which may be a violation of the SEC Act and the regs. (If untrue, there may be other issues of libel, unfair business practice, interference with advantageous relations, fraud, etc.)
I'm not saying that I like the fact that brokerage houses release information to select accounts first. However, it is clear that those analyses are opinions as opposed to purported "news alerts" or "truths". There is no overt attempt to be manipulative. That the analyst makes a market in the security and other disclosures are typically included in the report.
My comments about some of the self-styled analyst reports that are either published on the boards or released (after payment of the business wire fee) as a PR is that there is an intent to manipulate after selective disclosure.
At least one of the "analysts" states that he has no interest in the equity but is doing it as a "public service." Clearly, the actions of the "analyst" and others who often work in concert with that same "analyst" leads any reasonable person to the conclusion that it is part of a plan to sell short, release supposed news to the public and then campaign to bash the stock, all within a controlled time frame to get the most emotion out of the "news" release.
There is certainly a difference in implementation. You don't see brokers (at least they don't identify themselves as such) typically hyping on a board. If they did, they wouldn't say that they are doing it as a public service. Clearly that would be erroneous, manipulative, deceptive and violative of SEC regs.
I hope I answered your question. As I've mentioned, this is an area of evolving law, an area where there will be many more cases over the next few years. Sometimes, believe it or not, the law takes a common sense approach. It's hard to believe that the SEC or a Judge would believe that someone is doing a "public service" when that same person appears on the same boards with the same cohorts time and time again. The patterns are the same. The bashing, the scare tactics, the lemmings. In fact, you could almost change the stock symbol and use the same "PR" and bashing posts. Even the personal attacks are almost identical. Substantively, there is very little to differentiate one target from another. When the associate of the analyst brags about "creating volume" so that he was able to profit, that adds further evidence that there is a manipulative scheme that may have front run or scalped some shorts who followed and got burnt.
I put little credence in analysts on the long side who put little effort into a report and then release it under the guise of it being something more than what it is, an opinion by someone who knows as much about the company as you or I do. However, these are not released as "news releases" and I don't think a reasonable person would believe them to be such. If they were and there is selective disclosure before this release, I feel that this would be the same manipulative tactic of which I have been critical.
Did you know there are web sites that will give you a form to prepare your own analysis of an equity and then they will sell for you, keeping a cut? You can sell you own instant expert report for say $3 a pop. What a deal.
Frankly, why anyone would buy or sell based on what some self-styled analyst with a form puts out is beyond me. But we both know that it happens and people are scared into buying and selling based on their view that if it's published, it must be true. |
