Joel Myers, president of AccuWeather, a Pennsylvania-based weather forecasting firm, has called for increased regulation of the US National Weather Service (NWS). The request came amid fears that the NWS’s practice of offering certain institutions advanced access to meteorological data could create opportunities for ‘insider trading’ in the weather derivatives market.
Speaking at the annual meeting of the American Meteorological Society in Long Beach, California on February 12, Myers said the NWS should release its data under stricter controls and at the same time, to ensure its publication on a non-preferential basis.
Myers also noted the potential for insider trading has already been recognised by the US Department of Commerce, which has prohibited NWS employees from investing in weather derivatives since May 2000.
“The advance delivery of weather information to one sector of the economy, or to a friend, relative or favoured contact or business in a way that may move financial interests clearly creates serious issues of insider trading and improper influence,” Myers said.
He called for NWS regulation by the US Congress or the Department of Commerce, noting that the release of economic information is already regulated to prevent abuses within other federal government agencies, citing as examples the release of crop reports from the Department of Agriculture, economic statistics from the Department of Commerce and labour statistics from the Department of Labor.
“Giving forecasts for some agricultural interests and not others, favouring one media outlet over another or tipping off certain financial interests about upcoming official weather forecasts, warnings or outlooks shifts billions of dollars within the economy by favouring one business and penalising another,” Myers said. “None of this is the proper role of a government scientific agency, and it provides unfair advantages in the market-place.”