Do Analysts Merely Serve as a Conduit for Management's Private Information? Evidence From Their Stock Recommendations Around Regulation FD

2005 ◽  
Author(s):  
Bin Ke ◽  
Yong Yu
Keyword(s):  
Private Information ◽  
Stock Recommendations ◽  
Regulation Fd

From K Street to Wall Street: Political Connections and Stock Recommendations

2016 ◽  
Vol 92 (3) ◽  
pp. 87-112 ◽  
Author(s):  
Dane M. Christensen ◽  
Michael B. Mikhail ◽  
Beverly R. Walther ◽  
Laura A. Wellman
Keyword(s):  
Affordable Care Act ◽  
Private Information ◽  
Relevant Information ◽  
Political Connections ◽  
Omitted Variables ◽  
Political Contributions ◽  
Security Analysts ◽  
Wall Street ◽  
Stock Recommendations ◽  
Gain Access

ABSTRACTIn this study, we examine whether sell-side security analysts gain access to value-relevant information through political connections. We measure analysts' political connections based on political contributions at the brokerage-house level. We argue that if brokerages are able to obtain private information through their political connections, then analysts at politically connected brokerages should issue more profitable stock recommendations, and this increased profitability should be more pronounced for politically sensitive stocks. Our evidence is consistent with these predictions. Analyses of recommendations issued surrounding the Affordable Care Act further support our main inferences. Moreover, our findings hold after we employ numerous tests to address correlated omitted variables and endogeneity. Collectively, these results suggest that brokerages obtain value-relevant, nonpublic information from their political connections.JEL Classifications: G24; G38; G14.

Earnings Guidance after Regulation FD

CFA Digest ◽  
2004 ◽  
Vol 34 (2) ◽  
pp. 3-5
Author(s):  
Lorne Jeremy Zeiler
Keyword(s):  
Earnings Guidance ◽  
Regulation Fd
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