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Tippers and Tippees: Brokers’ Pre-Release of Price-Sensitive Information to Their VIP Clients

Nefedova, Tamara (2017), Tippers and Tippees: Brokers’ Pre-Release of Price-Sensitive Information to Their VIP Clients. https://basepub.dauphine.fr/handle/123456789/18744

Type
Document de travail / Working paper
External document link
https://ssrn.com/abstract=2188938
Date
2017
Series title
SSRN Working Paper Series
Pages
47
Metadata
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Author(s)
Nefedova, Tamara
Abstract (EN)
Using transaction-level data, I analyze information leakage of financial analyst recommendations to their elite clients, as well as characteristics of the institutional investors receiving such advance knowledge. I find that investment managers who have an established relationship with their brokers trade in the direction of the research in the 5-day period before the analyst coverage initiations. My results suggest that clients enjoying a privileged relationship with their broker receive and use the pre-released information in their trades.
Subjects / Keywords
broker-client relationship; analyst recommendations; institutional trading; private information
JEL
H32 - Firm
G14 - Information and Market Efficiency; Event Studies; Insider Trading
G24 - Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies