Insider Trading Suspected Ahead of Hyundai MPG Error Announcement
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.
SEE ALSO: Hyundai, Kia Admit to Overstating Gas Mileage on Most Models
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]
Jason Siu began his career in automotive journalism in 2003 with Modified Magazine, a property previously held by VerticalScope. As the West Coast Editor, he played a pivotal role while also extending his expertise to Modified Luxury & Exotics and Modified Mustangs. Beyond his editorial work, Jason authored two notable Cartech books. His tenure at AutoGuide.com saw him immersed in the daily news cycle, yet his passion for hands-on evaluation led him to focus on testing and product reviews, offering well-rounded recommendations to AutoGuide readers. Currently, as the Content Director for VerticalScope, Jason spearheads the content strategy for an array of online publications, a role that has him at the helm of ensuring quality and consistency across the board.
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