Did Apple analysts use inside information to sway the price of Apple stock? That’s the question on the minds of government investigators who recently launched a probe of Wall Street and a common signal of Apple’s planning: ‘channel checks.’ To combat the legendary reluctance for public statements, experts covering the Cupertino, Calif. media giant often refer to ‘channel checks’ as a way to provide investors with insight into the planning of the iPhone maker.
Although no analysts were charged, an RBC analyst report on increased iPad production and a Rodman & Redshaw report on low iPad production may have caused Apple Shares to dip, according to the Wall Street Journal.
The SEC investigation reportedly centers on the use of channel checks that relied on manufacturer representatives “to guage how a business is performing.” The government probe appears to be targeting four time periods where suspicious trading of Apple shares happened. Trades made in connection with the health of CEO Steve Jobs and iPod sales are part of the SEC investigation.
The government probe appears to be an effort to widen the definition of insider trading from its strict origins. Some investors, described as “wary” have met with SEC compliance officials and legal representatives to better understand the issue.
“Insider trading basically comes down to where you know or ought to know that the person from whom you’re getting this information has a duty to someone else to keep it confidential,” said Paul Atkins, former SEC commissioner.