I cannot say I feel sorry for him because I reckon talking one's book in the trading game is different than a long-term investor expounding on the long-term growth prospects of the apple of their affection. For those who do not know the difference, the former all-too-often uses the timing, publicity of disclosure and subsequent price reaction to shift their position to those who cannot distinguish between a trade and an investment. So while those enamored with, say someone like Mr Einhorn and his investment prowess, are buying - they are being sold the stock precisely by those touting its virtues. That doesn't mean I approve of violations of confidentiality. I do not. It is illegal, and talking your book is legal, even if you're doing the opposite which is merely devious and of a dubious ethical standard. But if, in the process, such leaking shines light (errrr Greenlight?) upon the practice of pump and dump, however slick, and/or professionally packaged, then I am tempted to focus upon its silver lining.
NYT's Dealbook today took note of the aggressive legal action. It said:
Mr. Einhorn contended in the petition that “the only persons who lawfully possessed information regarding Greenlight’s position in Micron were persons with a contractual, fiduciary or other duty to maintain the confidentiality of Greenlight’s position: Greenlight’s employees, counsel, prime and executing brokers and other agents.”
The irony and hypocrisy of this wasn't lost on me, again not because I do not agree with it, but because Mr Einhorn only a short time ago was censured for illegally dumping his 14% Punch Taverns position on a hair-trigger the just moments after he discovered (possibly even while he was discovering) material non-public information about forthcoming corporate finance activity, in breach of UK FCA code, (and probably every relevant line in CFA's code of conduct).
My point is clear: You cannot eat your cake, and then have it too (which, BTW I am told is the correct version of this proverb, not "Have your cake and eat it too"). If Mr Einhorn wants to play in, and profit from, the grey areas, be they regulatory or ethical, then he really shouldn't be hounding bloggers (or joining the plaintiffs suing Porsche over their snookering of VW shorts). To his credit, Mr Einhorn has an innocent-looking, impish grin that undoubtedly makes his grandmother very happy. But there is nothing nice or decent in his hypocritical actions.