Bank analysts buy stock before raising its target?

Cruise Automation Kiss bye
Aug 31, 2018 11 Comments

Found that every time XX analyst or bank raised the target price of a stock, the stock will go up usually. Then the analyst can make tons of money buying the stock before release the news? If not allowed, can indirectly buy anyway. Is that true?

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TOP 11 Comments
  • Indeed knowyrrole
    Uh how is this news?...these are opinion pieces. Nobody is forcing u to buy their recs. I think it's a given that most banks are going to market the fuck outta positions they buy into. There's definitely fundamentals behind buys but a lot of it is hyping their position. None of it is illegal. People don't realize how close most of these banks teeter on the line of legality. Quite frankly they can bake in fines for crossing the line as operating costs. Shit if u make a couple billion on a trade what's a $1/2billion fine tbh.
    Aug 31, 2018 1
    • Citadel / Other Punter
      You're so wrong on so many counts I don't know where to start.....
      There's a Chinese wall between research departments and the asset management part of banks.
      'Crossing the line' also lands you in jail, besides a fine for your employer. Making a couple BILLION off a single trade is impossibly hard because of market impact.
      Sep 1, 2018
  • Lazard fin/tech
    I mean this is called front-running and is illegal
    Sep 1, 2018 0
  • 500 Startups uiGe83
    For stock analysts, personally (as individual) is not allowed by SEC. At least in big shops you can’t actually buy the stock and sectors that you cover. Neither can your immediate family.
    For fund managers they can buy, and they managers disclose holdings after such advice pieces. They are in the business of investing not advising.
    Agree with knowyrrole in that at the institutional level things don’t stay that clean.
    Aug 31, 2018 0
  • Comcast JygG83
    That's gotta count as material, non-public information, no?
    Aug 31, 2018 1
    • Microsoft / Eng Tier 1
      No. Because analysts are not working with publicly available info, and publishing their opinions.
      Aug 31, 2018
  • Wish / Eng
    kagamoto

    Wish Eng

    PRE
    Amazon, Facebook, Google
    kagamotomore
    Upgrades and such events don’t always work. But search for Andrew Left as an example. Citron research. It’s legal. In banks, they have a policy to not sell for a month since the entry to be fair with their influence, and their customer information.
    Sep 1, 2018 0
  • New bKWB01
    That’s how you get in jail and lose your capital and reputation
    Aug 31, 2018 0
  • Cruise Automation Kiss bye
    OP
    I need to make some friends from that circle.
    Aug 31, 2018 0
  • Microsoft IEjP42
    It’s allowed, even without disclosure.
    Aug 31, 2018 0
  • Cisco baQk38
    I have heard abt this. Even fund managers do the same.
    Aug 31, 2018 0

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