"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.
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.
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...