Wall Street should fear academics

Wall Street firms would be wise to beware of academics out to make a name for themselves. There have been quite a few cases where professors have caught the eye of regulators: the order handling rules, way back when; the still on-going options backdating scandal. These are two examples of academia-driven regulatory actions. Which brings us to a new study by three University of Southern California professors. According to the New York Times, they have found evidence that "club deals may indeed be detrimental to target shareholders because they result in a lower price, on average, than in deals with a single private equity buyer." Shareholders basically get 10 percent less in club deals than single sponsor deals. It's unclear where the Justice Department's probe stands. This much is clear: There aren't many more club deals these days.  

For more:
- here's the New York Times item

Related Article:
Meet the man who uncovered the options scandal