Reuters is reporting that large-scale insider trading may be at the heart of some particularly fishy stock-selling behavior, just prior to the original announcement about the Hyundai-Kia fuel economy ratings debacle.

On November 1st, Hyundai-Kia shares traded roughly 2.2 million times (the single highest-volume day of the year), and the stock price fell by about four percent. For reference, a standard daily trading volume for the stock in 2012 saw about 600k shares trading hands. On November 2nd, the company made public the bad news about the dropping fuel economy ratings for many of its models. In other words: No one outside of the company (and only a smallish group inside the company, we'd imagine) should have known anything about the impending bad news as of the first day of November. After the announcement, the stock price tanked, as you'd expect, and trading volume was way down as well.

Experts seem fully aware that the whole thing reeks of leaked information and subsequent insider trading. If chicanery on this sort of scale seems wacky to you, you'd be inline with the experts who report to Reuters that the level of trading is absolutely suspicious.

The problem is, it seems, that this kind of market reaction is far from uncommon in Asia, especially. Research points out that 26 percent of price-sensitive announcements in the Asia Pacific region showed some hint of information leakage, just in the first quarter of this year. That figure is roughly double what is expected in North American markets; due in some significant part to much less stringent enforcement of insider trading regulations in Asia, as well as an established culture that doesn't necessarily see the behavior as criminal.


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  • 58 Comments
      jwosr98
      • 2 Years Ago
      Somebody sending e-mails to Congress again
      MONTEGOD7SS
      • 2 Years Ago
      "Give me control of a nation's money and I care not who makes it's laws" - Rothschild Between the banksters and stock/commodities manipulators, we're all just cogs on a wheel.
      dchristman51
      • 2 Years Ago
      No wonder congress left right away. Looks like a lot of congressmen (and women) have to reload their war chests much earlier now that they lost their butts on this insider trading debacle, lmao.
      dontcalld
      • 2 Years Ago
      if you want to understand how long this has been going on - read the new bio on the kennedy patriarch
      ribaudomarty
      • 2 Years Ago
      NO ! that can't be ! The market is manipulated!
      bofdem
      • 2 Years Ago
      Criminal third world Korean and ***** gooks. Surprise
        • 2 Years Ago
        @bofdem
        [blocked]
          kontroll
          • 2 Years Ago
          who the F**K are you mother Theresa to teach ethics to others by using such language you unfortunate
          chickenandrofls
          • 2 Years Ago
          Sad thing is the # of upvotes he got
        Thereminator
        • 2 Years Ago
        @bofdem
        Condemn the behaviorism...not meaningless physical traits or geographical locations. Judging Only our individual behaviorism keeps us on a Just and Even playing field.
      HUMANMPC2000
      • 2 Years Ago
      Everyday Hyundai & KIA is always in the news for shady business dealings.
      Healthy Chap
      • 2 Years Ago
      There's nothing morally wrong with insider trading, it sends signals to the marketplace.
      MySchizoBuddy
      • 2 Years Ago
      Only the US Congress is allowed insider trading. The rest should be send to jail.
      drewpy
      • 2 Years Ago
      This just keeps getting better.
      Marcopolo
      • 2 Years Ago
      This article has provoked a good deal of racist (and ignorant abuse) at Hyundai. It hasn't been all that many years since US car makers received estimates from their lawyers as to whether it was cheaper just to fight (or settle) litigation, than recall (or stop selling) vehicles with potentially lethal defects ! "Insider Trading", is a relatively new concept, and much misunderstood. Information regarding a challenge to Hyundai's fuel economy figures, can be attributed to quite a large number of sources. (including those who instigated the challenge). Asian (and most American) investors, would simply regard this as good intelligence. Receipt of this sort of information, is how traders make money for their clients. In Asia, such information is usually passed through extended family networks. In the West, third party devices are commonly employed to create the impression of 'Arms length' information, by means of obscure on-line (or printed) media articles, analysts reports etc. Sometimes major investors, hedge funds, competitors, even government's and government agencies, exchange secretly obtained (or manufactured) information, to create speculative trading opportunities. The victims of such activities are corporations like Hyundai, who must deal with the original problem, while also coping with a falling stock price and damaged image. It's the corporation who, (some times quite unfairly) , takes the criticism, not the profiteers or speculators. It's tough out there in the jungle.......
        kontroll
        • 2 Years Ago
        @Marcopolo
        don't put lipstick on a pig...insider trading is illigal I don't care where you are. Don't protect pigs just because you may be from that culture yourself. The gas milage scndal was attributed to another illiger activity called LYING TO THE CONSUMER They lied to the public deliberately to sell their POS cars to the stupid american consumer...and you guys know that and take advantage of that just like toyota does. If I could I would give you 10 TD becasue you're protecting pigs
          Marcopolo
          • 2 Years Ago
          @kontroll
          @ kontroll 'Patriotism, is always the large refuge of the scoundrel " !
        thatoneguy
        • 2 Years Ago
        @Marcopolo
        I love how all the racist comments on here are voted up, but the one comment with any sort of intelligence is down voted. That's america for you.
          kontroll
          • 2 Years Ago
          @thatoneguy
          and as far as you are concerned, you are the typical dumb American consumer
        carfan
        • 2 Years Ago
        @Marcopolo
        you obviously either have no idea what insider trading is or you condone it because in your "culture' stealing is acceptable. Well, insider trading basically is stealing from the shareholders and don't give us this bull$hit about how things are in asia. I am sure one asian doesn't like to be victimized by another asian regardless where you are and whop you are. You are a MORON
          Marcopolo
          • 2 Years Ago
          @carfan
          @ carfan You obviously have very little knowledge of 'trading', let alone 'insider trading' ! America's vast wealth was built on the manipulations of men like J.Peirpont Morgan and his father. GM was put together by "insider trading' and the manipulations of Alfred P Sloan. The stock-market was never about safe, secure investments ! It little more than a horse race, continually inventing more and more obscure financial products, to whet the speculators appetite. As a by-product the market creates vast surplus wealth that helps finance change and redistributes wealth. But essentially, it's a horse race ! Nor does everyone think laws against 'insider trading ' are beneficial ! Henry Manne, Milton Friedman, Thomas Sowell, Daniel Fischel, and Frank H. Easterbrook, are all eminent scholars and famous economists. All these eminent 'experts' would agree that laws banning insider trading should be revoked. Milton Friedman, who won the Nobel Prize in Economics, stated: "You want more insider trading, not less. You want to give the people most likely to have knowledge about deficiencies of the company an incentive to make the public aware of that." Friedman didn't believe trader's should be required to make information available to the public, because buying and selling pressure itself, is all the information the market needs. But hey, maybe you're right and these Nobel Laureates are 'morons' !
      icemilkcoffee
      • 2 Years Ago
      It's the crooked Hyundai execs. First they cheat their customers. Then they rip off their investors. What a nice bunch.
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