[crazygringo]

The idea that there is no problem because both McKinsey and the company want to make money seems... ludicrous to me, and completely misunderstands insider trading.

The problems would be:

1) McKinsey learns about non-public good things on the inside, and so buys even more stock than they otherwise would (pretty much the definition of insider trading) and/or sells competitors' stock

2) McKinsey learns about non-public bad things on the inside, and so sells stock they otherwise would have held and/or buys competitors' stock

I don't see how Matt Levine can possibly just brush that aside?

[tomp]

Why do you think that would be more likely in a structure like McKinsey's than in other structures? E.g. many banks have such structures (e.g. trading and M&A have a "firewall" between them so that no information crosses), and obviously insider trading/market manipulation happens between companies with no (or very little) legal connections (e.g. LIBOR scandal, or most other insider trading).

[Nicholas_C]

In the short time I worked for a bank during an internship it was very apparent that there is training one goes through regarding this sort of thing and a very formalized processes with strong rules about how you can even contact the other side of the house. I doubt McKinsey has this structure.

This is a pretty softball take by Matt Levine.

[nebolo]

Of course McKinsey has this structure. Indeed Puerto Rico recently investigated this structure and found it up to the task: https://www.mckinsey.com/~/media/mckinsey/about%20us/media%2...

[the_watcher]

Why would you assume that McKinsey doesn't also have a Chinese wall with training that MIO employees have to go through?

[Nicholas_C]

I would assume that since McKinsey is a consulting firm primarily they don’t have to comply with the same regulations that a bank does.

[akozak]

Insider trading would be bad and illegal. But absent evidence that it's happening, I think his point is that merely having a stake by holding securities isn't inherently problematic.

[casefields]

The biggest risk if they were doing it is if anyone whistle blows on them that person can get a fat reward: https://www.sec.gov/whistleblower

[lordnacho]

Well then McKinsey should just say which firms they have positions in, and everyone can be satisfied that there's no problem?

[solveit]

McKinsey should do nothing because responding to a non-story is terrible PR.

[diminoten]

Because they're signing a bunch of document saying they're not going to do exactly this, so if they are doing exactly this, well... with their own petards they shall be hoistened, and that's a given.