Options: Dispersions and Volatility Spreads

[Chris McConnel]

from Paul Kedrosky


Biovail and Material Nonpublic Information

A key quote from the multi-billion-dollar Biovail lawsuit against SAC, et al., for alleged stock manipulation:

       "[SAC founder Steven] Cohen uses his enormous  
        financial leverage to support SAC's trading  
        strategies by demanding access to material  
        nonpublic information from the financial  
        institutions with whom SAC does business,  
        including nonpublic inside information  
        concerning public companies and other clients  
        to whom those institutions owe fiduciary and  
        other duties of nondisclosure." 
 

I have no idea if it is true in this case, but where is the fun of being a billion-dollar hedge fund manager if you can't beat managers into giving you a little non-public information?