An unsolicited bid, and thus far negative responses amongst shareholders, are exacerbated by the suspicion of insider trading.
Along with the Securities and Exchange Commission, New York’s Attorney General is also investigating suspicious activities concerning trading of Dow Jones options in recent weeks. Rupert Murdoch, owner of News Corp., made a five billion dollar bid for Dow Jones & Company, and trading was high just before the offer was announced. About three thousand more options were traded than the number reported in the first quarter.
Also of note, shares traded at a volume nearly double that of average daily trading on April 17. While Dow Jones did report results that Tuesday, the date is significant because it is the same date that Murdoch sent his offer. Shares increased in price by nearly $20.00, netting some a tidy profit.
The Securities and Exchange Commission is in the process of cracking down on possible insider trading, and is especially sensitive to cases involving mergers. The SEC as well as the Attorney General of New York have issued subpoenas to both News Corp. and Dow Jones & Company. Both companies have stated that they would cooperate.
