Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250750 
Year of Publication: 
2022
Series/Report no.: 
CFR Working Paper No. 22-03
Publisher: 
University of Cologne, Centre for Financial Research (CFR), Cologne
Abstract: 
This study documents economically meaningful and persistent financial advisor fixed effects in target firms' abnormal stock returns shortly prior to takeover announcements.Additional difference-in-differences analyses suggest that advisors are associated with lower pre-bid stock returns after their senior staff were defendants in SEC insider trading enforcement actions. Returns are higher for advisors with more previously advised deals and those located in NYC. The evidence helps explain the prevalent phenomenon of pre-bid stock returns. It contributes to the inconclusive literature on banks' exploitation of private information gained via advisory services, which is limited to disclosed, traceable activities indicative of information leakage.
Subjects: 
Financial Advisors
Mergers and Acquisitions
Information Leakage
Target Runups
JEL: 
G14
G15
G21
G34
K42
Document Type: 
Working Paper

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