Big Stock Sales Are Supposed to Be Secret. The Numbers Indicate They Aren’t.

WSJ News Exclusive | Big Stock Sales Are Supposed to Be Secret. The Numbers Indicate They Aren’t.

Federal investigators are probing the big business of block trading on Wall Street, and a WSJ investigation shows why: Select investors appear to be catching wind ahead of time.

✒ Something strange keeps happening in the big business of block trading: share prices fall ahead of the large sales more often than not.

Was this due to leaking of information by investments banks, employees, or other insiders? Or was it linked to the expiration of lockup periods which can be known via public sources? Or could it be explained by a negative headline or simply bad luck?

The SEC has sought trading records and electronic communications from a number of big banks and hedge funds, and the Justice Department is also running its own probe.