SEC Goes After Analyst Foreshadowing

There is a rule, called Regulation FD, that says that U.S. public companies cannot selectively disclose material nonpublic information to some analysts or investors without disclosing it publicly. So a chief executive officer can’t meet with a big mutual fund, or a Wall Street analyst, and say “our earnings will be $1.75 per share this quarter,” unless her company has disclosed those earnings publicly.1 It is a weird set of stylized facts that:

What do they talk about in these meetings, which investors find so valuable, if not material nonpublic information? The weather? Information that is immaterial, but that can be combined with other immaterial information to become material? In insider-trading lore this is called the “mosaic theory”; in philosophy I believe it is called the “sorites paradox.”