Shorting Spitzer's Victims
October 22, 2004 4:33 PM   Subscribe

Would it be legal for a member of the NYAG's office to start shorting a company Spitzer's about to sue shortly before he makes his first press release about it, given that my impression from this article is that his doing so tends to lead to drops in stock prices?
posted by kenko to Work & Money (4 answers total)
 
It would probably be insider trading, so it would be illegal in the criminal sense.

Also not something the Bar Association would take kindly to, and could lead to them being unable to practice law.
posted by falconred at 5:04 PM on October 22, 2004


Ok. I guess it makes sense that it would be considered insider trading; I thought that you had to work at the company being traded for it to be insider, but that wasn't actually based on any knowledge (hence the question).

And I wouldn't expect the Bar or Spitzer to be happy with it—I just didn't know if it would be strictly legal.
posted by kenko at 5:40 PM on October 22, 2004


IANAL.

No.
posted by mkultra at 6:10 PM on October 22, 2004


In one case (someone with more Google patience than I can document this) a woman was prosecuted for insider trading because she owned a Manhattan sanitation company. She managed to extract enough information from the trash of major corporations to get ahead of the curve investment-wise and made a couple hundred grand before they found her.
posted by IshmaelGraves at 11:23 PM on October 22, 2004


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