Financial Times on Insider Trading

The Financial Times has another scoop - a study it commissioned, looking at stock trading in select compaines running up to announcements of big M&A activity:

Almost 60 percent of the 27 big deals announced in North America this year were precded by unexplained spikes in trading in the stock of the target company, according to a review of data by Measuredmarkets, a Toronto research firm. This compares with 15 percent for the seven largest deals announced in 2003.

Let's not go totally off the board, as 27 deals do not make a large subject for statistical analysis. And these were only "suspicious trades" and not an item-by-item analysis to see who was involved. But the analysis did look at whether news on specific days might have acted as an expected trigger for the activity. The pattern depended on the industry, with the spikes happening 80 percent of the time with hotels and casinos and just under a third of the time in telecommunications.

Although this isn't proof - let's be clear on that - it sure is a whole lot of smoke. Combine this with the study that the FT featured on July 30, showing that many Wall Street analysts received personal favors from executives whose companies they followed, and you've got to wonder if anything has changed in the world of big investing. Actually, you could assume that it's business as usual, which is a pity. Such activities are undertaken by robber barons - emphasis on the robber - and not real businesspeople, who have some regard for the entire activity of business itself.

The article itself is here, though you have to be a subscriber.