Home / Auto News / News article: Insider Trading Suspected Ahead of Hyundai MPG Error Announcement - AutoGuide.com News
 |  Dec 22 2012, 1:05 PM

Last month, Hyundai shocked the automotive world when the Korean automaker issued a recall of its fuel economy claims on several models across its lineup, including vehicles from Kia.

Now there’s a suspicion that insider trading took place prior to the announcement, when the automaker’s stock fell four percent on November 1st, a day before the announcement was made. Around 2.2-million shares were traded that day, the highest volume of the year up to that point.

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According to Robert Boxwell, director of Opera Advisors in Kuala Lumpur, the volume traded on November 1st was more than five standard deviations away from the daily average of 598,741 shares over the past year. It is believed that Asia Pacific’s markets are more prone to information leaks than American markets due to low enforcement rates for insider trading and breaches of disclosure rules. In fact, enforcement in some markets are essentially non-existent.

Of course, when Hyundai’s shares started to fall in Korea, rumors began swirling that something was awry with its vehicles causing more concerned traders to dump their shares. Investors believe that the automaker took too long to disclose what was happening.

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[Source: Reuters]