Work

Do hedge funds still manipulate stock prices?

Year: 2025

Type: article

Abstract: We find no evidence of stock price manipulation by hedge funds from 2011 to 2019, despite confirming the portfolio-pumping pattern documented between 2000 and 2010. In the more recent period, the magnitude, frequency, and persistence of manipulation by hedge funds appear to have declined. This decrease is linked to reduced rewards, as fund flows no longer react positively to the end-of-quarter returns of hedge fund portfolios. Proactive regulatory actions, measured by SEC litigation cases involving hedge funds, and increased press attention to hedge fund fraud also contribute to reduced manipulation during both periods.

Source: Journal of Corporate Finance

DOI: 10.1016/j.jcorpfin.2025.102765

Authors: Xinyu Cui, Olga Kolokolova

Institutions: University of Bristol, Lancaster University

Language: English

Topic: Financial Markets and Investment Strategies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $4,140

Funder: Milbank Memorial Fund