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

47 Pages Posted: 17 Dec 2012 Last revised: 24 Feb 2019

Date Written: December 15, 2017

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

JEL Classification: G14, G24

Suggested Citation

Nefedova, Tamara, Tippers and Tippees: Brokers’ Pre-Release of Price-Sensitive Information to Their VIP Clients (December 15, 2017). Available at SSRN: https://ssrn.com/abstract=2188938 or http://dx.doi.org/10.2139/ssrn.2188938

Tamara Nefedova (Contact Author)

Université Paris-Dauphine ( email )

Place du Maréchal de Tassigny
Paris, Cedex 16 75775
France

HOME PAGE: http://www.tamaranefedova.com

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