[downandout]

The anonymous sources on Bloomberg M&A scoops all have insider information one way or the other

Yes, but trading on nonpublic information is not illegal unless it was obtained from someone that the trader knew was breaching a duty to the corporation in disclosing it, and some form of compensation is paid to the person that breached it [1].

So it begs the question...how is simply receiving secondhand information from a reporter prosecutable?

[1] https://www.msnbc.com/msnbc/wall-street-prosecutor-preet-bha...

[throwaway789256]

I don't think they are prosecuting Peltz for getting the information from the reporter. They are prosecuting him for this:

"Peltz obtained material nonpublic information about the private equity firm’s interest in Ferro from a member of Ferro’s Board of Directors (the “Ferro Insider”), and/or the Board member’s fiancée (now wife) (the “Ferro Insider’s Fiancée”)."

https://www.sec.gov/litigation/complaints/2020/comp24998.pdf

Everybody knows that company board members are not allowed to share information about potential acquisitions.

The information from the reporter was secondary, although still important, for Peltz to execute his plan.

[downandout]

For sure, that is illegal. But the whole crux of this article, including the title, is about him having made trades just before Bloomberg articles were released, and the article states that this was mentioned in detail in the indictment. It makes me wonder why that is at all relevant if that’s not what he is actually being prosecuted for.

[throwaway789256]

Tying insider trading to a Bloomberg reporter is very rare, although it has happened before, and I linked to one instance above.

Because it is rare, it is newsworthy, particularly for the Columbia Journalism Review. Even if you don't care about journalism, the fact that one of the world's great news organizations and news wires has ties to insider trading should concern you and Bloomberg's top editors, because it's dirty. You just don't want your reporters abetting crimes if you can avoid it.

My guess is that Hammond will not last long at Bloomberg. This story is more about the reporter than about the insider trading. And it is less about the law, and more about journalistic ethics. It doesn't matter whether it is illegal for the reporter to tell Peltz that the story will come out soon; it is certainly against his agreement with Bloomberg.

[downandout]

I don’t disagree. I was just saying that the talking to the reporter aspect didn’t actually have any relevance to the criminal charges - at least not to insider trading. I read the indictment after my comments and, at least from what I can tell, I was right. Though talking to the reporter is mentioned in the facts part of the indictment, it does not appear to be a basis for any of the charges. It’s more of an interesting footnote.