The Wall Street Journal, by reviewing stock-ownership and deal records, identified dozens of instances in which investment banks appeared to be buying shares in target companies around the same time their bankers were advising the acquirers.
We study the "dark" role of advisory banks in the market for corporate control. We argue that advisors are privy to information about the deal that they may directly exploit by investing in the target firm. We show that the advisors to the bidders often have positions in the target before the deal announcement and that profit from such a position. A trading strategy conditional on the advisor's stake delivers a net-of-risk performance of 4.08% per month. This cannot be replicated using publicly available information. Advisors not only take positions in the deals on which they advise, but also directly affect the outcome of the deals, negotiating conditions that increase the probability of success. This has negative implications for the viability of the new entities.
The statistical pattern could be no more than a series of coincidences, reflecting unconnected events in disparate parts of giant investment banks. But if banks really are using inside information to profit on the run-up in stocks of companies that are taken over, that would be both illegal and unfair to other investors.
Ce n'est donc pas surprenant que les régulateurs américains s'intéressent à ce phénomène. À suivre. Après le backdating, il s'agit peut être d'un autre scandale mis au jour par des universitaires...