The market hates uncertainty. Right, we all know that. Investing 101 and Behavioural Finance will pound that message into your head very early in the game.
We place a premium on accurate and timely disclosure. Investors need to know. No one is to have an advantage. So goes the theory. We all know there are rogues and evil doers. So FDR created the SEC to enforce. The SEC has been slightly un-impressive lately. Actually they have been out to lunch for a long time.
In comes anonymous which now declares it will target those it feels are financial wrong doers. This usually means after some kind of investigation they will out you publicly. They may even follow-up with a denial of service attack immediately there after. The uncertainty will be enormous.
Seeing as no one has really knowingly talked to a member of anonymous it’s very hard to understand the standards that will be used. Right now with the SEC and lots of securities lawyers we think we know current legal standards.
The problem manifests in the accusation. Just screaming J’accuse may be enough to destroy shareholder wealth. Pension plans representing many coddled public servants will lose substantial amounts of money. Taxpayers will have to cough up and I mean cough up the difference.
The trick will be in acquiring the initial lead. Where and how will anonymous get their tips? What documents will be provided to support the claim? Even anonymous will want to check it out and not be a stooge. Speaking of which, does anonymous have the intellectual capital to discern what is truly wrong. This may be where it breaks down. They will eventually make a mistake. Who will be responsible? How much money do we have to lose this time?
Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.
- They killed Kenny er Goldman er Blankfein $GS #corpgov #sec @gselevator (financialskeptic.wordpress.com)
- #Anonymous declares was on #NYSE. Also will identify lies, cheats and thieves $NYX (financialskeptic.wordpress.com)