There is nothing wrong with this. Plenty of people have the info before it’s released (under NDA/embargo). Being one of these people AND trading on it before it’s released is a different story.

Ok, so TechCrunch violated whatever agreement they had with Snap. What is the consequence?

Nothing, for TC.

For Snap? A fine and a binding agreement not to do this again or else to designate TC as one of their preferred methods of disclosing financial information (like Elon's twitter is for Tesla).

Shareholders on the wrong sides of trades today can also sue Snap and have a good chance of recovering any putative losses. This is actually the bigger concern for Snap since this is likely a much bigger amount than any potential SEC fine.

I wouldn't say nothing for TC. Breaching embargoes is a very big deal in journalism and incidents like this greatly affect a publication's reputation. They are definitely not getting any such briefings for a while now.

I would say that is pre-2016. After 2016, journalism as a profession became extremely fast and loose. A "we'll apologize if we're wrong" approach took over, plus zero accountability or consequences for false information.

On the bright side, the SEC will eventually ask how this happened. Not that they do any serious enforcement these days.

Well they had time to prosecute a first year investment banking analyst who made $100k trading on insider information a few months ago and just this week did the same to another Goldman Sachs banker. I’m positive both resulted in gains much smaller than the losses some people sustained by this mishap.

Agreed, but I was only looking at it from a legal perspective.

TechCrunch might not be trusted with embargoed data. That's bad for their business, depending who decides to keep them in the dark from now on.

Techcrunch doesn't have a problem, they did exactly what they were supposed to do: publish the information immediately.

The problem is that someone at Snap did not do what they were supposed to do. Rather than a broad disclosure, they made a limited one, which had a noticeable affect on the market.

And this is exactly the type of failure that the SEC likes to police. It's like to result in a small fine and/or binding agreement for Snap to broadly disseminate financial results in the future, rather than leaking financials to favored journalists.

> Techcrunch doesn't have a problem, they did exactly what they were supposed to do: publish the information immediately.

Do a little research into “embargo” in regards to news media and you’ll understand it’s a very very common thing.

People who aren't lawyers have an inflated sense of the legal consequences of breaking an embargo.

The damage to TC is reputational, if that. This isn't the first embargo TC has broken and it won't be the last. If anything, they've developed a reputation as the place to send leaks to.

There is virtually no impact to TC, outside they likely won’t get embargoed content from that source for a while, if ever. Also, TC will still get the article after it hits the wire, they aren’t exclusively in the breaking news category desperately trying to always be “first”, so a slight delay isn’t probably a deal breaker for them.

This is probably part of the reason embargo leaks aren’t that unusual.

I don’t see how this is insider trading.

Someone provided confidential information to an external party. Trades for large gains were made before the information was made public through appropriate channels.

There is enough for an investigation. Whether it leads to criminal charges is a very different thing.

I guess my issue is that once it’s published by TechCrunch, it doesn’t feel like it’s nonpublic anymore.

If someone at TechCrunch were to trade on the information before releasing it then I guess that would probably count (and it certainly would breach whatever NDA there was). Similarly for someone who passed information on to an accomplice.

But just the article being released a bit early doesn’t really feel like insider trading (at least in the US). If a draft of the article were left in a coffee shop and someone found it and traded on it that wouldn’t be insider trading. And that situation feels a lot more nonpublic than this one. I don’t really see how TechCrunch would plan to gain from releasing their article to everyone at the same slightly early time.

Naturally it feels unfair but insider trading isn’t really about fairness in that more general sense.

That would be if the SEC was on top of their game and investigated every public mishap.

Doubt the SEC will do anything in this case.

There has to be a trade for it to be insider trading.