Hunt and News International: a market abuse angle
Was there a wrongful disclosure of price sensitive information?
One potential issue for Culture Secretary Jeremy Hunt and his former special adviser Adam Smith in the developing scandal of how the News International bid for the remaining shares of BSkyB was handled is the possible application of the law relating to the unauthorised disclosure of market sensitive information.
Many of the emails by News Corp's director of public affairs, Fred Michel - which were published yesterday - speak to this point. But I will simply look at the one sent to James Murdoch on 24 January which contains the resonant phrase (in bold), "managed to get some infos on the plans for tomorrow (although absolutely illegal..>!)."This discloses to James Murdoch that Mr Hunt would make a press statement at 7.30am and a statement to parliament at 9.30am.This statement would confirm that Ofcom felt the BSkyB takeover would harm plurality and should be passed to the Competition Commission - but would also say that News Corp would be given an opportunity to come up with remedies (or undertakings in lieu, to use the jargon), to prevent the Commission investigation.Now Mr Hunt's planned statements to the press and parliament were confidential and price sensitive (with a bearing on the share prices of BSkyB and of News Corp). I know this because the DCMS said this to me, explicitly, at the time.But Mr Michel had learned what Mr Hunt would say, from Mr Smith (or so Mr Michel says). And Mr Michel was discussing Mr Hunt's planned statement with Mr Murdoch at 3.21pm, the time of the email, or while markets were still open.So, on the face of it, Mr Michel and Mr Murdoch should not have been given this information, or at least not without signing a formal confidentiality agreement.Mr Michel implied, with his "absolutely illegal" comment, that no confidentiality agreement had been signed.Now it may be that the transmission of this information was covered by some general duty of confidentiality. But it does all look a bit odd.