"Acquiring and Trading on Complex Information: How Hedge Funds Use the Freedom of Information Act"

FOIA, it's where the action is.
Although this paper focuses on getting an edge in pharma and biotech there are other problems to which the tool may be applied.

From the Social Science Research Network:

50 Pages Posted: 1 Sep 2015 Last revised: 3 Sep 2015

April KleinNew York University (NYU) - Department of Accounting

Tao Li
University of Florida - Department of Finance, Insurance and Real Estate

Date Written: August 2015

Abstract

Using the Freedom of Information Act, hedge funds receive records from the Food and Drug Administration about new product approvals, factory inspections, and complaints. We use the funds' receipt of this information to empirically test implications of theories about investors with bounded rationality acquiring complex information for trading purposes. Consistent with theory, we find evidence that the magnitude of hedge fund trades is positively related to the funds' prior knowledge about the target firm and the FOIA process, and to the short-term abnormal stock returns derived from trading.

Keywords: Freedom of Information Act, FDA, Complex Information, Bounded rationality, Hedge funds, Trading

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