When Hyundai-Kia announced they'd overstated EPA mileage for some of their best-selling vehicles on November 2nd you'd have expected a massive selloff as investors reacted to the news. Instead, the massive selloff occurred the day before the announcement, leading experts to wonder if investors weren't leaked the information ahead of time.
It's hard not to notice the volume increase when you look at the chart. There were 2.24 million shares traded on November 1st — the most volume at that point during 2012 — and only 1.15 million the next day. And they weren't buying. In the absence of any other reason to buy or sell, what other explanation is there?
In most Western markets we're trained to think that trading like this is wrong, but as a hedge-funder in Singapore points out "the idea that insider trading is wrong rather than smart is only being ingrained in the current generation of Asian players, not the older generation who are often still in the driving seat."
So, if you got hosed on the announcement, it's possible you don't know the right shady people.