Could the NYT have profited legally from its Wal-Mart expose? According to CNBC’s John Carney Felix Salmon has raised an interesting question: could The New York Times sell early access to market-moving scoops to hedge funds?
After The New York Times published the results of its investigation of the Wal-Mart bribery case, something like $12 billion came off its market cap.
Clearly, early access to the story would have been very valuable to traders. So, in this age of cash-strapped news organizations, shouldn’t The New York Times be able to monetize the value of scoops by selling early access to hedge funds?
It’s very clear that The New York Times isn’t in the front-running business. In fact, I suspect that the potential market-moving effect of the story played a role in the timing of the publication. By publishing it over the weekend, the editors assured that information would be fully disseminated into the market before anyone could trade Wal-Mart’s stock. No one received even a momentary edge from asymmetric information. But let’s say a particularly enterprising publisher took over at the paper and decided to launch a NYT: Frontrunner subscription service. Would it work? Would it be legal?
Read more at http://www.cnbc.com/id/47193585