Sorkin writes: "Now, a groundbreaking new study finally puts what we've instinctively thought into hard numbers - and the truth is worse than we imagined. A quarter of all public company deals may involve some kind of insider trading."
The NYSE trading floor. (photo: Adam Jeffery/CNBC)
17 June 14
he results are persuasive and disturbing, suggesting that law enforcement is woefully behind — or perhaps is so overwhelmed that it simply looks for the most egregious examples of insider trading, or for prominent targets who can attract headlines.
The professors are so confident in their findings of pervasive insider trading that they determined statistically that the odds of the trading "arising out of chance" were "about three in a trillion." (It's easier, in other words, to hit the lottery.)
But, the professors conclude, the Securities and Exchange Commission litigated only "about 4.7 percent of the 1,859 M.&A. deals included in our sample."
