The groundbreaking study took a look at stock option movements in the 30 days before the announcement of a major deal and found that "law enforcement is woefully behind--or perhaps so overwhelmed that it simply looks for the most egregious examples of insider trading, or for prominent targets who can attract headlines," wrote Professors
The professors believe that insider trading is so pervasive that they figured the odds of such serendipitous trading before deals were "about three in a trillion," stretching the extreme limits of probability.
Despite ¼ of all deals involving insider trading, only 4.7% of those illegal deals were prosecuted by the
Despite the hunch that insider trading was widespread, Voudrie and other money managers were still a bit stunned by the number attached to the problem. "Think about it!" he said, "25% of all announced deals had participants who illegally profited because of their access to non-public information that wasn't yet priced into the stock." That would be akin to "going to Vegas and playing the roulette wheel if you knew ahead of time what the next color and number were," he added. "Yet, apparently, it happens in the stock market on a very regular basis."
As for the tepid performance of
The only proper conclusion to draw from the report, Voudrie added, was that "There have been some large players that have gone to jail for insider trading, but, based on this study, it appears that the vast majority of those trading on illegal information escape prosecution."
A financial services industry veteran with more than 20 years experience,
Read the full story at http://www.prweb.com/releases/2014/06/prweb11962935.htm
Most Popular Stories
- James Foley Beheading Video Is Real Thing: White House
- McDonald's Packages Coffee for National Distribution
- Faith Groups Divest From Fossil Fuels
- Apple Stock Bounces Back Big Time
- Notes From the July FOMC Meeting
- Castro-Blanco Joins Fifth Street Finance Board
- Ballmer Steps Down From Microsoft Board
- Honda's Safe Approach Pays Off in Sales
- GE Healthcare Bringing Jobs to Massachusetts
- Target Slashes Annual Profit Outlook