Insider Trading Is Rife With No Regulators in Sight
From ADT to Fitbit, intense trading precedes official disclosure of corporate transactions.
When did investors know about Google’s stake in ADT?
Photographer: Michael Nagle/Bloomberg
At 6 a.m. on Aug. 3, Google bought a 6.6% stake in ADT Inc., the largest U.S. home security company, for $450 million. ADT appreciated 100% as soon as the stock market opened. But the headlines detailing the transaction weren't a total surprise because more than a few people knew ADT was poised to benefit from an event big enough to be gaining Google's hitherto inaccessible technology.
Three days earlier, when ADT wasn't reporting much of anything, a series of computerized trading alerts derived from the algorithms of Bloomberg Automated Intelligence (BAI) revealed insiders' unmistakable handiwork: