Whispers of Mergers Set Off Suspicious Trading

The boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic.
It is against the law to trade on inside information about an imminent merger, of course. roblem.
But an analysis of the nation’s biggest mergers over the last 12 months indicates that the securities of 41 percent of the companies receiving buyout bids exhibited abnormal and suspicious trading in the days and weeks before those deals became public. For those who bought shares during these periods of unusual trading, quick gains of as much as 40 percent were possible.