The joy of knowledgeINSIDER-TRADING prosecutions gain netted plenty of small fry. But many grumble that the big fish swim off unharmed. That nagging alarm has some recent academic backing,from three studies. One argues that well-connected insiders profited even from the financial crisis.* The others go further still, suggesting the entire share-trading system is rigged.**What is known about insider trading tends to reach from prosecutions. But these require fortuitous tip-offs and extensive, and expensive investigations,involving the examination of complex evidence from phone calls, e-mails or informants wired with recorders. The resulting haze of numbers may befuddle a jury unless they are leavened with a few spicy details—exotic code words, or say,or (even better) suitcases filled with cash.
The papers form imaginative exhaust of pattern analysis from data to find that insider trading is probably pervasive. The approach reflects a recent way of analysing conduct in the...
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Source: economist.com