(August 3 – 10:25 ET) – High closing, it’s not just for Canadian fund managers anymore. An article from theStreet.com finds recent evidence of the practice in the United States, too.
Quarter-end and year-end “window dressing” is frequently discussed and winked at, but not until the RT Capital Management Inc. case earlier this year has it been conclusively proven in the Canadian market anyway. A recent article by theStreet.com suggests that it has become a monthly phenomenon in the U.S. in some big tech stocks, and at the close of trading on July 31.
It notes that more than half of the 24 components in TheStreet.com Internet Sector index spiked higher just before market close. The index jumped 1.3% in the last half-hour of trading. It notes that Lycos added 2.3%, Ariba added 1.5%, and BroadVision added 3.4%. All dropped the following day.
The story says that while mutual fund managers are most interested in quarter end boosts, hedge funds that must report monthly results are the likely culprits. It admits however that there’s no easy way to prove that fund managers are playing dirty pool. Innocent trading can often look just like manipulative trading.
-IE Staff