Market Manipulation: A Comprehensive Study of Stock Pools
Shanghai University of Finance and Economics
Paul G. Mahoney
University of Virginia School of Law
New York University (NYU) - Department of Finance
NYU Working Paper No. FIN-04-022
Using a hand collected new data set, this paper examines in detail a classic account of stock market manipulationâ¬ the â¬Sstock poolsâ¬? of the 1920s, which prompted the current anti-manipulation rules in the United States. We examine abnormal turnover and returns and the relationship between them, as well as the long-term performance of the selected stocks. We conclude that the evidence suggests informed trading rather than manipulation. Our findings have implications for regulatory policy as well as the investigation and prosecution of manipulation cases.
Number of Pages in PDF File: 34
Keywords: Manipulation, Market regulation, Politics of finance
Date posted: November 3, 2008
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