Ross Professor and Team Win $1 Million Grant to Uncover Financial Market Manipulations

Uday Rajan

Uday Rajan, the Hermelin Professor of Business Administration and chair and professor of finance and real estate, will conduct a three-year research study with the aid of a $1 million research grant from the National Science Foundation.

The study will include two other University of Michigan professors: Computer Science & Engineering Professor Michael P. Wellman and Ford School of Public Policy Dean Michael S. Barr. Tucker Balch from the Georgia Institute of Technology is also working on the study.

The researchers aim to develop algorithmic techniques to detect manipulation in financial markets, particularly the U.S. equity markets.

“Manipulation can damage the integrity of the financial system,” Professor Rajan says. “It undermines trust in the markets, which reduces participation, especially at a time when many people are already suspicious of financial markets. In addition, prices of financial assets play a key role in capital allocation to firms and sectors. Any distortion of these prices can have important, real effects on the economy. We hope our work will inform policy and regulations in securities markets.”