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Benedicte Gravrand, Opalesque London: Rumors in financial markets - insights into behavioral finance, by Mark Schindler, Switzerland, 2007, 210 pages, publisher: John Wiley and Sons Ltd, England (www.wileyfinance.com).

An academic research piece dissects the nature of rumors as well as their effects on financial markets participants.

Financial rumors in today’s context A couple of weeks ago, the SEC subpoenaed 50 hedge funds as part of an investigation into the spreading of false rumors to manipulate Bear Stearns and Lehman’s stocks. SEC chairman Cox said in a Bloomberg interview that he could do it because he had the tools: “The technological tools that we now have to track down e-mails, instant messages, phone calls and other things helps us work with our criminal law counterparts to do a much better job.” A review of the general opinion later found that Wall Streeters did not think the SEC would find the rumor-mongers (coverage). Such is rumors’ veil of mystery: no one knows were they come from or how they came to be. Yet they are the oldest form of mass communication, according to Mark Schindler, author of the book ‘Rumors in financial markets’. And rumors thrive in financial markets.

Mark Sc......................

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