Using broker level data we demonstrate that relatively optimistic and relatively pessimistic analyst earnings forecasts both generate trade for their brokerage firms. This relationship is found to be asymmetric as the influence of relatively optimistic analyst forecasts on own broker market...

Stocks with similar characteristics but different levels of ownership by financial institutions have returns and risk premia that comove very differently with shocks to the risk bearing capacity of financial intermediaries. After accounting for observable stock characteristics, excess returns on...

We show that hedge funds gain an information advantage from their prime broker banks regarding the banks' corporate borrowers. The connected hedge funds make abnormally large trades in the stocks of borrowing firms prior to loan announcements, and these trades outperform other trades. The...

This paper considers the possibility of efficient trade in bilateral bargaining through an informed broker. I propose a cross-subsidization mechanism that implements efficient trade in dominant strategies. I provide a condition on the broker's information such that efficient trade can be achieved

Recent regulatory debate in the financial advice industry has focused on expanding fiduciary duties to broker-dealers. Proponents of this reform argue that it would improve the advice given to clients and limit losses from agency problems, while detractors counter that such regulation would...

We examine the implications of interested intermediaries on corporate actions, stock prices, and investors' portfolio decisions. An interested intermediary is an asset manager who has private preferences over corporate actions, which could relate to corporate governance policies, social or...