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Do Insider Trading Laws Work?

Do Insider Trading Laws Work? This paper presents the first comprehensive global study of insider trading laws and their first enforcement. In a sample of 4,541 acquisitions from 52 countries, I find that insider trading enforcement increases both the incidence, and the profitability of insider trading. The expected total insider trading gains increase. Consequently, laws that proscribe insider trading fail to eliminate insider profits. However, harsher laws work better at reducing the incidence of illegal insider trading. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png European Financial Management Wiley

Do Insider Trading Laws Work?

European Financial Management , Volume 11 (3) – Jun 1, 2005

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References (60)

Publisher
Wiley
Copyright
Copyright © 2005 Wiley Subscription Services, Inc., A Wiley Company
ISSN
1354-7798
eISSN
1468-036X
DOI
10.1111/j.1354-7798.2005.00285.x
Publisher site
See Article on Publisher Site

Abstract

This paper presents the first comprehensive global study of insider trading laws and their first enforcement. In a sample of 4,541 acquisitions from 52 countries, I find that insider trading enforcement increases both the incidence, and the profitability of insider trading. The expected total insider trading gains increase. Consequently, laws that proscribe insider trading fail to eliminate insider profits. However, harsher laws work better at reducing the incidence of illegal insider trading.

Journal

European Financial ManagementWiley

Published: Jun 1, 2005

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