The gray list contains stocks whose trading by a brokerage office or a bank is prohibited by the arbitration bureau.
Risk arbitrage is an investment strategy that hopes to profit from the stock prices of mergers and acquisitions.
Greylisting prevents investment banking clients of a risk arbitrage financial firm from transacting in these pending securities in order to prevent insider trading or the perception of insider trading.
Greylists are strictly confidential, as they may reveal information about mergers and acquisitions or other bank clients.