Following up on our earlier disclosure about potential insider trading in 3Com stock, we have uncovered something interesting. Did Goldman (in)advertently tip off clients that 3Com was potentially in strategic negotiations? 3Com was previously supposed to present at Goldman's Data Center Techtonics Conference today at the Sheraton Hotel in New York (Agenda below). In a limited distribution note, Goldman yesterday advised selected clients that 3Com had withdrawn at the last minute from the Conference. As those in the industry are well aware, any last minute switches of this kind are indicative of imminent good or bad news dissemination, and more often than not are associated with some strategic announcement.
While the person buying the calls (if indeed this was not a calendar spread) may have been provoked to do so as a hedge against anything crazy out of the firm, it is amusing that once again a very selectively disseminated piece of information to only Goldman clients may have been the driving reason for making markets "efficient."