About a quarter of U.S. merger and acquisition deals have insider-related options trading activity before official announcements, but only a fraction are being investigated by regulators, according to an academic study.

The study by professors at New York University and McGill University in Montreal— which looked at informed trading activity in equity options before merger and acquisition announcements from January 1996 through December 2012— showed 25 percent of the deals had some sort of unusual activity taking place 30 days before the deal announcement.

“The probability of option volume on a random day exceeding that of our strongly unusual trading sample is trivial— about three in a trillion,” said the study, which was published last week.

“Informed traders are more likely to trade on their private information when the anticipated abnormal stock price performance upon announcement is larger and when they have the opportunity to hide their trades due to greater liquidity of the target companies.”

The study also noted that many of these cases go undetected. The U.S. Securities and Exchange Commission litigated only about 4.7 percent of the 1,859 M&A deals included in the sample.

“According to our discussions with the regulator, the SEC, being resource constrained, pursues larger-sized cases that provide the biggest ‘bang for the buck’ from a regulatory perspective,” the study said.

“The large number of [SEC] investigations for stock trades relative to option trades stands in contrast to our finding of pervasive abnormal call option trading volumes that are relatively greater than the abnormal stock volumes.”

The research reached a similar conclusion as a Reuters investigation in April 2013 that looked at abnormal options activity in equity options ahead of major deals. A study for Reuters by options research firm Schaeffer’s Investment Research found that in 181 takeovers, big stock repurchases or a major investment between 2012 and 2013, nearly a quarter showed unusual options activity before the news.

(Reporting by Angela Moon; Editing by Jan Paschal)