Breaking: Yahoo Finance Message Boards raided by FBI

In an incredible twist, the FBI and DOJ have raided the Yahoo Message Boards today as part of an expanding investigation into insider trading.  According to most recent reports, the FBI is investigating numerous players in the investment field (including 6 hedge funds) in what pundits are calling Insider Trading Fest(ivus)

Posing as bigdaddywantmoney123 and insiderhoneypot, two detectives have been monitoring suspicious activity for the past 7-11 years on the industry’s most active site to share useless, inane, political opinions.

After serving a warrant to…um…eh…(WTF?? Who’s in charge over there at Yahoo?!), the FBI sent a team of forensic detectives to do their thing on the Yahoo Finance Message Boards on a set of servers located in Sunnyvale, CA.

The smoking guns

$BIDU: On the Baidu ($BIDU) message board, asiantradermakingseriousyuan said that his cousin’s brother’s wife who lives in Beijing knows BIDU’s CEO’s brother’s nanny and she says the company is on fire. Clearly, impactful nonpublic information.  Google, here we come!

$AAPL: Over on the media device juggernaut’s boards, user macforlifebaby said that he’s got an in with a janitor who cleans Steve Job’s dentist’s office and reportedly, the Apple Computer CEO had a least three teeth whitenings in the past 3 years.  Heady stuff — what you trying to hide, Steve, eh??

$AMZN: This one’s really good. You know the hot Kindle book reader device sold by Amazon.com.  Well, supposedly, someone’s posting on the message boards who works at UPS in Seattle and he estimated that he’s picking up more boxes this year than ever before at the retailing giant.  God, that’s good info!

$PCLN: This one seems a bit far-fetched but illustrates how individual investors are not playing on a level playing field when it comes to investing.  So, you know how you can bid on hotel rooms on Priceline.com?  Well the stock is one of the best performers over the past 12 months and IwanttohaveWilliamShatnersbaby says that he (she?) noticed that hotels in New York city are going for less than they were 3 months ago.  Short it baby!!

In all seriousness, the FBI is taking these allegations seriously and says its aim is to prevent leakage of potentially tradeable info onto the message boards.  The FBI has suggested the Internet to be turned off periodically and power cut to those homes suspected of aiding and abetting these criminals.

The Atlantic on WSJ iPad app: It’s working

Interesting analysis on The Atlantic today regarding the WSJ’s paid content experiment on the iPad.

Let’s remember (from the article):

  • Apple sold about 500,000 iPad units in its first week
  • 3200 WSJ iPad apps sold so far at $17.29/mo (or bundled together with other editions)
  • 30,000 current WSJ subs trialing a free version of the app — so room for paid conversion

Rupert Murdoch has been a loud proponent of paid, subscription content as a revenue model.  It will be interesting to see how this all pans out.  Ultimately, it may be Apple, though,  that wins in the whole movement towards new forms of paid financial content.