Paramount pictures initially released the film "The Wolf of Wall Street" on December 17, 2013. At that time, a lot of the seniors in this class were making the choice on what college to attend and what kind of academic programs to consider. The controversially, sexy, and dangerous allure of the finance/brokerage industry portrayed through the protagonist (Jordan Belfort) might say something about the status quo of "the real" industry at play. This article in the Saturday edition of The Economist cites three different academic studies that attempt to describe the potential pervasiveness of insider trading. The article references one study that studied nearly 500 financial institutions activity from 2005-2011. The other two studies at play were from 1999 to 2014 and followed the trades of 300 brokers. Through the dissection of these studies, it is clear some level of sleaziness still persists across market.
If you clicked on this post and are bored by now, read this final excerpt from the article:
"Large institutions can be both beneficiaries and victims of this sort of
information leakage. But in general they are net gainers. The real
losers, the papers conclude, are retail customers and smaller asset
managers. Common to all the papers is the recognition that the public
markets are, as conspiracy theorists have long argued, not truly public
at all. Changing the law to fix that may not even be feasible. But at
least, in large-scale data-crunching, a new type of corporate sleuth is
on the case."
Interesting insight... If you are entering the financial world, how will YOU behave?
https://www.economist.com/news/finance-and-economics/21736561-one-study-suggests-insiders-profited-even-global-financial-crisis-another?fsrc=scn/tw/te/bl/ed/insidertradinghasbeenrifeonwallstreetacademicsconcludeintheknow
2 comments:
The Wolf of Wall Street brought the corruption and supposed "glamour" of insider trading to the American public. I can imagine that lifestyle must appeal to some of our generation looking to start out in the finance industry, but we can only hope that the growing importance of ethics and stricter laws for trading would crack down the unlawfulness that occurs. Although according to this article our country looks has a long way to go.
In my preliminary research and coursework into capital markets, this seems very plausible to me. With the ever increasing speeds of transactions in the market and the complex algorithms utilized by contemporary platforms, the only opportunities for vast profits seem to lie in undisclosed private data about the future.
Post a Comment