No Bad News? Sounds Like Government Sanctioned Insider Trading
Submitted by Experience Not Logic Blog
A recent FT article on Pre-Olympic warnings to China’s fund managers (h/t to The China Vortex) says that the China Securities Regulatory Commission (CSRC) warned fund managers “that companies should be cautious about holding public forums “which may cause market fluctuations”.” The article aptly describes this as a “clumsy … directive to manage the level of the stock market.”
I’ve only got the one course in Corporations, but if China had SEC rules and any of these fund managers have a duty to speak, don’t speak, and then make trades, they’d probably be up for 10b-5 liability for insider trading. A BIG criticism of China’s markets is that they’re opaque. Opacity creates greater uncertainty as investors are unsure about the true health of their investments. With the world in town for a couple of weeks, greater opacity seems a strange solution for stability.
H0pefully, China really is only jumping in bed with Henry Manne for the duration of the Athletic Festival Honoring Zeus.
