Hunterbrook: A Hedge Fund and Newspaper

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Hunterbrook publishes investigative journalism and general news with a “high commitment to the ethics of reporting,” but there is a catch.

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Before they publish, they send the stories to Hunterbrook’s affiliated hedge fund (Hunterbrook Capital), which can trade on the news.

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Hunterbrook hopes its trading profits can pay for the journalists’ salaries.

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Matt Levine, from Bloomberg, describes the business model as an activist short-selling hedge fund–it investigates companies, finds problems, shorts the companies, and then noisily publishes its investigation to draw attention to the issues.

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Trading is not the only way Hunterbrook plans to make money. Instead of implementing a paywall or running ads like a traditional media company, it plans to sell data, research, and articles for use in class-action and shareholder litigation lawsuits against the corporations it reports on that lie to customers, communities, partners, and shareholders.

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Hunterbrook’s business model is innovative, but is it legal?

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Hunterbrook plans to only trade on information in certain instances when reporting does not include Material Non-Public Information (MNPI), also known as “insider info.”

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Talk about walking a fine line.