How a Bloomberg reporter was used for insider trading

Longtime business journalist Bill Grueskin writes for Columbia Journalism Review about the case of alleged insider trading where the investor used Bloomberg News reporter Ed Hammond to drop tips of deals that he traded upon.

Grueskin writes, “The indictment notes that Peltz’s moves were timed closely to stories that ran at “a financial news organization.’ While the newsroom isn’t named, federal officials cite five stories and their timestamps— all of which match precisely to pieces that ran on Bloomberg News’ website. Each of those stories had shared bylines, but only one reporter is identified as an author for all of the articles: Ed Hammond, who worked at the Financial Times before coming to Bloomberg more than six years ago to cover mergers and acquisitions. In 2017, Hammond was named Bloomberg’s senior deals reporter in New York — a highly prestigious post in that newsroom.

“The feds allege that Peltz used disposable ‘burner’ phones and encrypted apps to communicate with a journalist, and that the reporter provided ‘material nonpublic information about forthcoming articles’ which Peltz used to trade in the market ‘just prior to publication of an article about each company written by the reporter.’ The indictment describes ‘numerous contacts’ between Peltz and a reporter, including at least one in-person meeting.

“Neither Hammond nor Bloomberg is named in the indictment; the filing says a financial-news reporter’s identity was made known to the grand jury that heard the case. No one at Bloomberg is accused by prosecutors of wrongdoing or of being aware that these stories might be linked to an insider-trading scheme. Prosecutors make no allegation that the stories contained any inaccurate information, nor do any of the stories display corrections.

“Bloomberg is looking into the matter, according to a person familiar with the issue. A company spokesperson said, ‘Ed Hammond is a very accomplished reporter. We’re not aware of any facts to suggest any wrongdoing on his part.’ Hammond declined to comment for this story.”