Wall Street Analysts Being Investigated For Apple “Channel Checks”

Posted Nov 24, 2010

The U.S. Securities Exchange Commission is looking into Wall Street analysts that cover Apple Inc. (NASDAQ:AAPL). These analysts might be sniffing around for too much insider information by doing routine “channel checks.” Channel checks are when analysts check with suppliers and manufacturers about orders from Apple.

No analysts have been charged as of yet by the SEC. “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 SEC former commissioner Paul Atkins in an interview with The Wall Street Journal. “If you go in and pay the mail clerk to give you special information, that’s not proper.”

Channel checking suppliers of Apple is very popular considering how secretive of a company that they are. The Journal pointed out that an RBC analyst report on increased iPad production and a Rodman & Redshaw report on low iPad production volumes may have affected Apple’s stock price directly.

Other events that the SEC is looking into in regards to insider information includes the health of Apple CEO Steve Jobs and information about iPod sales. You may also remember that two years ago Apple’s market cap tumbled $4 billion after Engadget wrote a post saying that the iPhone and Leopard operating system would be seriously delayed.

[Wall Street Journal]