Barry Pollack comments on the recent investigation of several media companies for possible insider trading by prematurely releasing market-sensitive government information provided to news reporters under an embargo and later officially released to the public. The investigation focused on whether media companies using high-speed transmission systems may have given traders access to economic information seconds before the official release time. Federal law enforcement officials have decided not to pursue any criminal charges related to the investigation.
"Even though the government is closing the investigation, it could have a chilling effect on media companies," Pollack said. "It could cause them to be concerned that if they publish legitimate market information an instant before a competitor, they could be accused of somehow facilitating insider trading."
The government should continue to be cautious about handling economic information, but it needs to understand that it loses control of that information once the data is released, according to Pollack.