Insider Trading – Blogging That Might Be Risky Business

Web logs are growing at an exponential pace on the internet, with an unpredictable and dramatic rise in new users and new services. A study by Jeffrey Henning recently predicted that there will be a total of 53.4 million blogs by year’s end, with thousands being created weekly. But it’s what these blogs contain that interest traders.

Blogs can cover topics as serious as the war in Iraq or as ridiculous as pictures of things placed on cats, but they are the way people all over the world have begun communicating their thoughts, their feelings, and their day-to-day news. And this day-to-day news, which often includes work-place information, is what is worrying regulators, and corporations.

And while the media digests the landmark Martha Stewart insider trader trial, the spotlight is now turning to blogs – potentially the new hotspot for insider trader. Market commentators are already predicting that certain blogs may be crossing the border between up-to-date news and insider trader, and corporations have started looking carefully at employee blogs.

`What regulators may be scared of is the potential for this new media to leak stock price sensitive news to the market,` Mr. Jenyns explained. `Just think about it, thousands of trading blogs and hundreds of active bloggers from fortune 500 companies making posts every day. These bloggers talk about everything from their private lives to the inner working of the businesses. Sometimes this news is unreleased to the market and can potentially tip traders to buy or sell stocks.`