Wednesday, June 20, 2018

Commerce Secretary Shorted Stock After He Learned The New York Times Was Doing a Negative Story

Commerce Secretary Wilbur L. Ross Jr.
From The New York Times:
Commerce Secretary Wilbur L. Ross Jr. shorted stock in a shipping firm — an investment tactic for profiting if share prices fall — days after learning that reporters were preparing a potentially negative story about his dealings with the Kremlin-linked company.

The transaction, valued between $100,000 and $250,000, took place last fall after Mr. Ross became aware that journalists investigating offshore finances were looking at his investments in the shipper Navigator Holdings, whose major clients included a Russian energy company. The New York Times emailed a list of questions about Navigator to Mr. Ross on Oct. 26.

Three business days later, Mr. Ross, a wealthy investor, opened a short position in Navigator, according to filings released on Monday by the Office of Government Ethics. The company’s stock price slid about 4 percent before Mr. Ross closed his position on Nov. 16, eleven days after the articles were published by The Times and the International Consortium of Investigative Journalists as part of the “Paradise Papers” project....

In interviews, ethics watchdogs raised alarms, saying the short sale created the appearance that Mr. Ross was acting on nonpublic information to potentially profit, which federal officer-holders are prohibited from doing...

On Tuesday afternoon, Mr. Ross issued a statement pushing back against the notion that he had nonpublic information about Navigator before he shorted its stock. He said the reporter who contacted him was writing “about my personal financial holdings and not about Navigator Holdings or its prospects,” and therefore it was not “market-moving information.”

However, the Oct. 26 letter from The Times clearly explained, in the first paragraph, that “the story focuses mostly on your involvement with Navigator Holdings.” It went on to include 10 questions related to Navigator, Mr. Ross’s relationship with the firm and its ties to Russia.
Just keep in mind this character is negotiating trade deals. Any guesses as to what motivates him to approve a deal?



  1. The problem is not that bureaucrats act on insider information: it’s that the state can use extortion to compile the information in the first place.

    It’s folly to expect these people to forgo using an advantage when it’s right there under their noses.

    1. You are correct. And it’s so backwards, since they’re the only people who arguably SHOULD be banned from insider trading.