Dual Trading and Conflicts of Interest of Stock Exchange Intermediaries : evidence from Mergers and Acquisitions.

Summary This thesis includes three chapters on the conflicts of interest of intermediaries acting as M&A advisors. In Chapter 1, we provide a synthesis of the academic literature on the dual proprietary and client trading of market intermediaries. First, we provide an overview of this activity, and then explore questions such as who engages in this activity, why, and key concerns about conflicts of interest. In Chapter 2, we conduct an empirical analysis focusing on the mergers and acquisitions aspect of the research problem. Finally, in Chapter 3 we study the role of intermediaries who act as financial advisors in M&A transactions. We do this through an empirical analysis of a sample where we can identify, around the time of the announcement, in which transactions an advisor was involved. The results show value creation in M&A targets on the day of the event, the presence of informed trading and pre-announcement information leakage particularly strong for deals in which an advisor was involved. Our analysis allows us to highlight the importance of taking into account the regulatory aspect of M&A transactions.