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85 Knots: Day 4 - The Kelvin

Secret App Tells All.

by Paul Creech on Thursday, February 6, 2014


You are not anonymous online.

TechCrunch just released an article about the new app Secret is great for trolling journalists and has become a place where unsubstantiated rumors pop up. The headline graphic that they chose was a shared Secret post that says, “I work at Evernote and we’re about to get acquired.” A claim quickly denied by Evernote. The article notes that Secret can be used to spread rumors for malicious purposes–such as trolling tech journalists. Why troll tech-jurnos? To increase the price of stock so that you can sell it. To “anonymously” communicated privileged inside information, like that the company you work out will be acquired to another person.

Let’s talk about this app. Ok, to sign up you have to give your email address, which you must then verify. Sure you can go an create one on any number of websites using a fake name. But then you must give up your telephone number to Secret. When you open the app it uses your contacts to find your friends and allows you to see their secrets and vise versa. When you favorite a friends’ Secret post it shares it with your friends. You can play a little game and try and figure you who posted the Secret. The App shows the state of origin (let me know if you can play along in Canada) and if you know only one bored stay at home mom still clinging to that Connecticut area code cell phone number then you can match the ‘secret’ about them being scared of clowns with their sad attempts to get attention on every form and facet of social media…but I digress.

When you post a Secret about how your company is being acquired it can lead to the stock in your company going up (if its publicly traded and identifiable) or the acquiring company’s stock decreasing (if its publicly traded and identifiable) as the public trades on your information. People, your friends, you trade on this information because they know its you may be committing securities violations (as you may be). A person could also being trying to raise the price of their stock to dump it, or lower a stock to short it, or be engaged in any number of securities violations. But who cares because its not like the Securities and Exchange Commission or the Federal Bureau of Investigation have the power to issue a subpoena on Secret for your phone number, email address, IP address, favorite color, etc…I’m not talking about illegal NSA secret squirrel metadata parallel construction fourth amendment violation stuff. I mean probable cause federal subpoena that you won’t find out about until after your indicted, which will happen after you try to talk your way out of your suspicious trades with a bunch of lies the agents know are lies because they already have your Secret posts, trade histories, and favorite color. That’s what’s known as convicting yourself right out of your own mouth.

There is piece of legislation in the United States that protects your electronic communications, except for subpoenas from law enforcement. Its not highly litigated because tech companies just give up your information along with handy guides about how to interpret the data.  Does it apply to Apps? Do you think a Federal judge will step in to protect your Secret posts? Do you think a tech giant, much less a start-up, will spend the dough to fight the government subpoena for your Secret posts?

Short answer: Not bloody likely.

Which means that you should share just your own personal secrets about how you feel about your former best friend’s girlfriend’s roommate, and not share the confidential inside information that you receive because you work at a company, or have a company as a client, or anything other damn reason. The Secret app, as the headline suggests, tells all.

I’m going to follow this post up with a posting giving you a walking around idea about what insider-trading is and how to avoid the appearance of impropriety that can land you in hot water.

Again, please, I beg you to understand: You are not anonymous online.

Paul Creech
Paul Creech is an attorney living in Houston, Texas. Paul has baccalaureate degrees in philosophy and political science from Utah State University, and a juris doctorate degree from Houston College of Law. He is a former U.S. Marine. Besides the law, Paul's interests include sports, art, and food.