Sunday, August 27, 2006

"Suspicious Trading" - to say the least

Whispers of Mergers Set Off Suspicious Trading. This really is a fascinating article and a devastating analysis of recent major mergers in the United States. The gist of the article is the suggestion that there has been insider trading in connection with potentially 40 percent of these mergers. No exact lines are drawn here. But there sure as heck is a lot of abnormal trading going on that looks quite suspect on days when a board approves a takeover bid, for example. Or when a company's due diligence analysis is underway. What's really interesting here is the idea that it's not just rogue individuals who are the likely culprits, but brokerage firms, hedge funds and the "takeover crowd" of advisers. The systemic aspect of this article is really incredible.

Just a thought...wouldn't you love to see Eliot Spitzer head up the S.E.C.?