Title: Beyond the Shadows: Dark Web and Financial Markets

Speaker: Prof. Guang Ma (Rutgers Business School, Rutgers University)

Date: Wednesday, June 10, 2026

Time: 4:30 PM - 5:50 PM

Venue: 90402 International Hall

Abstract

We examine the impact of dark web on financial markets. Using Large Language Models to analyze 297,935 posts, we find that dark web signals lead surface web by seven days, reflecting significant verification latency. Dark web posts exhibiting negative sentiment or high financial specificity predict stock returns. We document a dual effect. First, it acts as an involuntary preemptive disclosure mechanism that erodes insiders’ trading profits. Second, this advantage is mainly captured by sophisticated institutional investors and short sellers, but not retail investors. We conclude that the dark web fosters “clandestine efficiency”: accelerating price discovery while deepening the sophistication gap.