| SEC probes ETF use in insider trading |
| The Securities and Exchange Commission is investigating whether Wall Street traders are using exchange-traded funds as a means of disguising insider trading. ETFs have emerged as a possible mechanism for maximising gains in one stock while potentially masking trading patterns, people familiar with the matter say. http://link.ft.com/r/J0VG55/ |
Thursday, February 10, 2011
Using ETFs for insider trading
They find an ETF which the stock is included and then short the rest as necessary. All for the sake of disguising their tracks - the whole idea isn't it? This sort of thing never ends. It will accompany every innovation, and I bet this has been happening for a long time before the regulators catch up with them.
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