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

Tamara Nefedova
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Tamara Nefedova: DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

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Abstract: 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.

Keywords: broker-client relationship; analyst recommendations; institutional trading; private information (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

Published in Social Sciences Research Network, 2017, ⟨10.2139/ssrn.2188938⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02108869

DOI: 10.2139/ssrn.2188938

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