Published time: May 15, 2014 19:42
Researchers in Singapore say millions of dollars in profit was generated illegally by traders in the United States who took advantage of privileged Federal Reserve policy decisions disclosed to them before becoming publicly available.
According to that study, “robust evidence” exists suggesting that traders who knew in advance about Fed rate announcements traded during an embargo period, unlawfully benefiting by cutting those deals at the most opportune moment possible and in turn pocketing upwards of $256 million during a 16-year span.
Price movements between September 1997 and June 2013 noted by the researchers were “statistically significant and in the direction of the subsequent policy surprise,” Gennaro Bernile, Jianfeng Hu and Yuehua Tang wrote in their paper published out of Singapore Management University and first…
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