Pittsburgh Post-Gazette – Unusual trading in a relatively new corner of the bond market illustrates how the rise of increasingly sophisticated financial instruments is potentially outpacing theability of regulators to police them.
In recent months, there have been spikes in the prices of so-called credit-default swaps, which are a kind of default insurance on debt, popular among banks, hedge funds and other big investors. In some prominent cases recently — including deals involving hospital operator HCA Inc. and energy company Anadarko Petroleum Corp. — prices of the swaps climbed in the weeks before news of major acquisitions became public.
That raises the possibility that some traders might have acted on inside information.
