Does it help firms to secretly pay for stock promoters

•Deals between listed firms and promoters who have been secretly hired to increase their stock prices are examined.•Secret promotion leads to an initial increase in the price and trading volume of the firms on the date that the secret promotion starts.•Reversal in Price is documented when regulators (e.g. SEC or NASD) take action against these promoters for not disclosing their relationships with the hiring firms.•Motivations of the hiring firms are examined. The main motive behind these relationships is to maximize the private benefits of the firm’s managers and owners.