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Anonymous stock-market manipulators behind $20B+ of “mispricing” may be tracked by their writing types / Boing Boing

In a brand new Columbia Law and Economics Working Paper, Columbia Law prof Joshua Mitts uses “stylometry” (previously) to trace how market manipulators who publish false details about companies in an effort to revenue from choices are capable of flush their previous identities once they grow to be infamous for misinformation and reboot them under new handles.

Stylometry is a area of textual content evaluation that seeks to establish authors by stylistic quirks, including word-choices, punctuation habits, and subtler cues like sentence-length and construction.

Mitts studied 2,000 “attacks” printed on the finance web site Seeking Alpha, displaying that the scammers concerned have been shedding previous identities when their monetary evaluation proved to be incorrect — and in addition displaying that somebody (perhaps the scammers, perhaps the Seeking Alpha editors, perhaps another person) — was making a killing by shopping for choices before the publication of inaccurate knowledge.

Mitts uses stylometry to establish when a number of consecutive pseudonyms appear to belong to the identical nameless writer, however he would not really try and unmask the writer, although the identical stylometry methods could produce proof, if not proof, of the scammers’ identities.

Pseudonymous assaults on public companies are adopted by inventory price declines and sharp reversals. I discover these patterns are probably pushed by manipulative inventory choices buying and selling by pseudonymous authors. Among 1,720 pseudonymous assaults on mid- and large-cap corporations from 2010-2017, I establish over $20.1 billion of mispricing. Reputation concept suggests these reversals persist as a result of pseudonymity permits manipulators to modify identities with out accountability. Using stylometric evaluation, I present that pseudonymous authors exploit the notion that they’re reliable, solely to modify identities after shedding credibility with the market.

Short and Distort [Joshua Mitts/Columbia Law and Economics Working Paper No. 592]

(through Marginal Revolution)

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