trading on inside information is illegal, and when it involves highly classified details about a future CIA coup, it verges on treason. Yet the researchers found that prices of companies affected by the CIA's regime-toppling efforts—UFC in Guatemala, Anglo-Iranian (oil) in Iran, Anaconda (mining) in Chile, and American Sugar in Cuba—went up in the weeks and months preceding the coups. (The authors restrict their analysis to coups for which they had access to declassified planning documents and for which U.S. companies had had property nationalized by the targeted regimes.)
Furthermore, these gains were concentrated in the days following crucial government authorizations or plans for the coup (suggesting the trades weren't simply the result of good guesswork about a coup in the making). For example, in the week that President Eisenhower gave full approval to Operation PBFortune to overthrow Árbenz, UFC's price went up by 3.8 percent; the stock market overall was flat that week.
In all, shares of coup-affected companies went up by a total of 10 percent following top-secret authorizations, swamping the 3.5 percent gain that came immediately in the coups' aftermaths. If information hadn't been leaking into the stock market via insider trading, then the entire impact of the coup should have appeared only when the very public invasions took place and the investing world finally got news of the regime change.
There's also some evidence, albeit tentative, that the market was very good at forecasting the coups' success and failure—a further indication that the traders driving up the price had detailed knowledge of the covert plans (and their expected outcomes). The CIA-led invasion of Cuba is referred to these days as the Bay of Pigs fiasco for a reason, and whoever was trading on insider knowledge seemed to place his bets accordingly—the pre-invasion increase in American Sugar's stock price was much lower than the gains for companies affected by the other, successful coups in the study.