I just caught this on CNBC and didn't hear the entire story. It seems the FBI is looking into one month's data that was out of line and significantly moved the market. Maybe they'll put those front runners at UM in jail with Martha.
This is from the WSJ Online this afternoon: "The University of Michigan's consumer-sentiment survey is one of the market's more controversial economic indicators. While closely watched, the report is released to subscribers only, on a twice monthly basis, through a conference call and via the Web site of the organization. The final monthly reading of the report is also released publicly, but not until several hours after the information is given to subscribers. The mid-month release, around which this investigation centers, isn't released publicly." If I understand this correctly, it seems that the survey people are upset that a wide number of people got the non-public survey information, rather than solely its paying subscribers getting the non-public information. (Since it is private info, it is legal to sell it to subscribers and then to release it to the public.) The whole thing is strange.
What about the fact that this number gets "front-run" by the subscribers who get the number "several hours" before it is announced to the public and markets? And the FBI or the SEC doesn't want to check on that?
Surprisingly low publicity, but check this out Too many hands in da cookie jar........ Not bad for 30k Front Running and Pre-Released Data at the University of Michigan "The story doesn't end there. We also found out that the University of Michigan has been selling Mr. Fornell's data to investment banks, analysts, and brokerage firms for up to $30,000 a year. The brokerage firms and banks receive the data two weeks prior to it being released to the investing public (and the media). (This practice of selling data to investment banks and other subscribers is carried over to the better-known Consumer Satisfaction survey as well.)" http://www.earningsbase.com/research/wake_up2_UofM.jsp We gotta love them level playing fields.!!!!
Exactly. The subscribers paid for the information. What the f*** is wrong with this country anyways? A bunch of whiners and tattletales for our wonderful government. Yeah, let's report everyone to the SEC and send everyone to jail. Oh, and even better, let's get the jarheads at the FBI who were so brilliant during the flight school investigation to knock on everyone's door. Jesus H, can we start a new country somewhere else?
The University pulls in about $700,000 per year off these subscriptions . . . And plays a lot of "cat and mouse" games with the wire services on the morning of the release. Apparently, the guy in charge of the disc and data last month was "missing" the disc for the report back on February 13th and he noticed this around 4:45AM. The February report was expected to be very strong. But came in surprisingly weak. A non-governmental report. So I guess that "front-running" is not an issue.
What's interesting, why pay 30k to get the data 2 weeks before the public, when you can get it for free 2 weeks later??.
But I heard somewhere that it is part of the Leading Economic Indicators calculation. I would think if it has anything to do with government data releases it shouldn't be given early to subscribers. That's equivalent to trading on stock news before everyone else gets it.
Subscribers get the release at 8:50 AM Chicago time. The release is in the form of a conference call. The media outlets get the number at the same time as the subscribers and it comes out over the wire services a fraction of a second later (they have to type in the number and press enter). The FBI investigation deals with someone who got the number hours before everyone else. These leaks happen too often and not just with the Michigan number; itâs about time the authorities got involved.