Who Falls Prey to the Wolf of Wall Street? Investor Participation in Market Manipulation

Manipulative communications touting stocks are common in capital markets around the world.  These so-called pump and dump schemes have attracted significant regulatory attention.  Although the price distortions created by such touts are well known, little is known about the investors who choose to invest in these pump-and-dump schemes.  By examining a large set of pump and dump schemes and a proprietary set of trading records from a major German online bank, we provide novel evidence on investor participation in market manipulation, including the participation rate, size of the investments and investor losses, as well as the determinants of these statistics.  Our evidence suggests that there are multiple types of investors and that not all investors fall prey to pump and dump schemes.



Fee: No

Contact Information:
Elaine Iannicelli
eri@case.edu

Friday, Nov. 18, 2016 from 10:30 a.m. to noon
Peter B. Lewis Building - Room 501
11119 Bellflower Road
Cleveland, OH 44106-7235
United States
Speaker(s): CHRISTIAN LEUZ, University of Chicago Booth School
Sponsored by: Depts of Accountancy and Banking and Finance

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