“They should have released it as soon as they discovered the error,” said Julia Coronado, chief economist for North America at BNP Paribas in New York. “It is not fair to give anybody an information advantage on policy deliberations.”
The minutes of the March FOMC meeting showed that several Fed officials said the central bank should begin tapering its quantitative easing program later this year and stop it by year end.
The members “thought that if the outlook for labor market conditions improved as anticipated, it would probably be appropriate to slow purchases later in the year and to stop them by year-end,” the minutes showed.
In August, the Labor Department posted jobless claims data to the agency’s website about 15 minutes before the scheduled release. At least one firm, Stone & McCarthy Research Associates in Princeton, New Jersey, accessed the figures before the embargoed release time. Investors and economists monitor unemployment benefits data for clues on the labor market’s health.
Time to Prepare
Reporters in lockups at the Labor Department and elsewhere are given market-sensitive data 30 to 60 minutes before their broader release. The system gives journalists time to prepare stories and headlines that are published when a government employee opens communications lines to the news organizations’ computer systems.
The early release of sensitive financial information has become more common at U.S. corporations over the 15 years with the proliferation of new ways to disseminate data.
Chipmaker Intel Corp. inadvertently e-mailed its results in January to a group of reporters about five minutes before the end of regular trading. Google Inc., operator of the world’s biggest Internet search engine, prematurely released an earnings report in October, leading Chief Executive Officer Larry Page to apologize on the conference call for what he called the “scramble” of the early release.
Walt Disney Co. shares dropped in early November 2010 after the media company posted results prior to the market close. Computer maker Dell Inc., a year earlier, accidentally posted an earnings announcement on its website before the close, causing its stock to climb as results topped analysts’ estimates.
During the dot-com bubble’s peak year of 2000, Sun Microsystems Inc., Novellus Systems Inc., Electronic Data Systems Corp. and Compaq Computer Corp. all posted results online before their intended release.