Wall Street Cheats: Study Reveals Insiders Use ETFs To Conceal Trading Ahead Of M&A Announcements

Posted by freedomforall 1 year ago to Business
9 comments | Share | Flag

"A new study published on the Social Science Research Network (SSRN) reveals that exchange-traded funds (ETFs) are a "new form" of insider trading for those in the 'know' about upcoming merger and acquisition deals. The reason is that the ETF conceals their trading and is harder to track because the fund owns a basket of other stocks. Insiders, who trade on non-public information, are pivoting from single stock bets ahead of announcements because securities agencies can easily flag trading activity.

The paper is titled "Using ETFs to Conceal Insider Trading" and explains:

Our evidence suggests that some traders in possession of material non-public information about upcoming M&A announcements trade in ETFs that contain the target stock, rather than trading the underlying company shares, thereby concealing their insider trading. "
SOURCE URL: https://www.zerohedge.com/markets/study-reveals-insiders-use-etfs-conceal-trading-ahead-ma-announcements

Add Comment


All Comments Hide marked as read Mark all as read

  • Posted by $ blarman 1 year ago
    You mean the system is rigged in favor of the mega-investors to bilk the common person out of their 401K and savings?!?! Say it ain't so, Joe! [/s]

    This is why these "alternative" investments (which don't amount to actual partial ownership in a company) should be avoided by investors entirely and probably banned by government.
    Reply | Mark as read | Best of... | Permalink  
    • Posted by 1 year ago
      The gold and silver ETF's have assisted government in manipulating/suppressing the prices of precious metals vs fiat, so don't hold your breath waiting for the corrupt government to level the playing field. ;^)
      Reply | Mark as read | Parent | Best of... | Permalink  
      • Posted by $ blarman 1 year ago
        As long as those decisions are delegated to bureaucrats by our elected officials, we'll get more of what we've already gotten: corruption. We need to get rid of 90% of our Executive and get back to its Constitutional duties.
        Reply | Mark as read | Parent | Best of... | Permalink  


  • Comment hidden. Undo