The problem with insider obsession
If investors needed another reason to distrust the stock market, here鈥檚 a doozy. A study by a trio of researchers in the U.S. and Canada into聽insider trading聽found that one-quarter of the big merger and acquisition (M&A) deals over a 15-year period鈥攔oughly 460 transactions in total鈥攎ay have seen people profiting on information before it was public.
...聽While the idea of corporate insiders whispering tips to their pals is almost a Wall Street clich茅鈥攐ne firmly grounded in reality, mind you鈥攖he full extent of the practice has, until now, never been quantified. The academics鈥斊还� economist聽Patrick Augustin聽along with two New York University professors, Menachem Brenner and Marti Subrahmanyam鈥攑ored over more than 1,850 U.S. M&A transactions between 1996 and 2012.聽
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