AccSus Publication in Management Science

A new Management Science paper by Maximilian Muhn and co-authors (Christian Leuz, Steffen Meyer, Eugene Soltes, Andreas Hackethal) offers rare insight into the investors who participate in pump-and-dump schemes. Studying 470 schemes alongside trading data from more than 110,000 retail investors, the authors find that nearly 8% of active investors take part and lose almost 30% on average.
The study identifies distinct investor types and shows that portfolio composition and past trading behavior are far more informative predictors of participation than demographics. It also documents longer-lasting effects on investors beyond the immediate losses. The findings suggest that effective regulation must be grounded in understanding who invests in these schemes and for what reasons.

Find the paper here: https://pubsonline.informs.org/doi/10.1287/mnsc.2023.03181