Do corporate insiders circumvent insider trading regulations? The case of stock repurchases

1996 ◽  
Vol 7 (1) ◽  
Author(s):  
R.Richardson Pettit ◽  
Yulong Ma ◽  
Jia He
Keyword(s):  
Insider Trading ◽  
Stock Repurchases ◽  
Corporate Insiders

Do Corporate Insiders Circumvent Insider Trading Regulations? The Case of Stock Repurchases

CFA Digest ◽  
1997 ◽  
Vol 27 (2) ◽  
pp. 4-6
Author(s):  
James W. Wansley
Keyword(s):  
Insider Trading ◽  
Stock Repurchases ◽  
Corporate Insiders

scholarly journals Insider Trading in Germany — Do Corporate Insiders Exploit Inside Information?

2008 ◽  
Vol 1 (2) ◽  
pp. 188-205 ◽  
Author(s):  
Björn M. Dymke ◽  
Andreas Walter
Keyword(s):  
Insider Trading ◽  
Inside Information ◽  
Corporate Insiders

scholarly journals Signalling, Insider Trading, And Post-Offering Performance: The Case Of Initial Public Offerings

2011 ◽  
Vol 9 (3) ◽  
pp. 80 ◽  
Author(s):  
Thomas H. Eyssell ◽  
Donald R. Kummer
Keyword(s):  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Insider Trading ◽  
Going Public ◽  
Public Offerings ◽  
Corporate Insiders ◽  
Ipo Pricing ◽  
Public Offering

Previous IPO studies have concluded that, on average, (1) the shares of firms going public are underpriced at the time of the offering, (2) prices adjust rapidly in the aftermarket, and (3) IPOs are generally poor performers over the longer-term. This study reevaluates the IPO pricing phenomenon utilizing more recent data and empirically tests the signaling models of Leland and Pyle (1977) and Gale and Stiglitz (1989), which imply that both first-day and aftermarket returns may be related to insiders transactions. Our results suggest that initial returns are inversely related to the proportion of the offering representing insiders share and that corporate insiders are, on average, net sellers in the year subsequent to the initial public offering. We also find that the greatest volume of post-offering insider sales occurs in those firms in which insiders are sold shares at the offering.

Insider Trading Around Stock Split Announcements

2011 ◽  
Vol 16 (3) ◽  
Author(s):  
Yulong Ma ◽  
Huey-Lian Sun ◽  
Jasmine Yur-Austin
Keyword(s):  
Information Content ◽  
Insider Trading ◽  
Abnormal Returns ◽  
Portfolio Diversification ◽  
Stock Splits ◽  
Trading Behavior ◽  
Corporate Insiders ◽  
Stock Split ◽  
Empirical Analyses

This research examines the trading behavior and motives of corporate insiders around announcements of firms' stock splits. Our empirical analyses document significant increases in insider sales prior to the announcement. Further, pre-announcement insider sales are found to be positively related to pre-announcement-period abnormal returns. These findings suggest that insider trading before stock split announcements is motivated mainly by portfolio diversification needs rather than by the information content of the announcements.

scholarly journals INSIDER TRADING DALAM PERSPEKTIF HUKUM PASAR MODAL DI INDONESIA

2019 ◽  
Vol 5 (2) ◽  
pp. 228
Author(s):  
Yunial Laily Mutiari ◽  
Irsan [email protected] ◽  
Muhammad Syahri Ramadhan
Keyword(s):  
Central Asia ◽  
Insider Trading ◽  
Corporate Insiders

Insider trading merupakan kegiatan corporate insiders atau praktek orang dalam korporasi yang melaksanakan transaksi kegiatan sekuritas atau trading dengan memanfaatkan informasi yang eksklusif yang mereka miliki atau inside nonpublic information atau yang dikenal dengan istilah informasi orang dalam. Pada Tahun 2001 silam, dunia pasar modal diguncang kasus besar mengenai adanya laporan indikasi insider trading dan manipulasi pasar dalam penjualan saham PT Bank Central Asia Tbk. Bahwa terdapat indikasi terjadinya kegiatan insider trading pada pembentukan harga saham PT. BCA. Sanksi yang dapat diberikan terhadap pelaku insider trading adalah berdasarkan Pasal 104 UU No. 8/1995 tentang Pasar Modal.

The informativeness of short sellers: an insider’s perspective

2018 ◽  
Vol 8 (4) ◽  
pp. 354-386 ◽  
Author(s):  
George Gao ◽  
Qingzhong Ma ◽  
David Ng
Keyword(s):  
Information Extraction ◽  
Insider Trading ◽  
Private Information ◽  
Stock Prices ◽  
Target Firm ◽  
Content Type ◽  
Short Sellers ◽  
Short Sale ◽  
Corporate Insiders ◽  
Extract Information

Purpose The purpose of this paper is to empirically examine whether corporate insiders extract information from activity of outsiders, specifically the short sellers. Design/methodology/approach Using portfolio approach and Fama-MacBeth regressions, this study examines the relation between short interest and subsequent insider trading activities. Findings The following results are reported. First, there is a strong inverse relation between short selling and subsequent insider trading, which is partially due to common private information and same target firm characteristics. Second, insiders extract information from shorts. This information extraction effect is more pronounced for firms whose insiders have stronger incentives to extract shorts information (insider purchases, higher short sale constraints, and better information environments). Third, during the September 2008 shorting ban, the information extraction affect disappeared among the large banned firms, whose shorting activities were distorted. Research limitations/implications The findings contradict the of-cited accusations corporate executives hold against short sellers. Instead, corporate insiders appear to trade in the same direction as suggested by shorting activities. Practical implications Among the vocal critics of short sellers are corporate insiders, who allege that short sellers beat down their stock prices. Many corporations even engage in stock repurchases to show confidence that the stock will perform well going forward despite the short sellers’ actions. This paper’s analysis on their personal portfolios suggests the other way around. Originality/value By focusing on how corporate insider trading is related to shorts information, this paper sheds new light on whether corporate decisions convey the true information the corporate insiders possess.

Why is insider trading law ineffective? Three antitrust suggestions

2016 ◽  
Vol 33 (4) ◽  
pp. 704-715 ◽  
Author(s):  
Viktoria Dalko ◽  
Michael H. Wang
Keyword(s):  
Literature Review ◽  
Insider Trading ◽  
Design Methodology ◽  
Equity Market ◽  
Monopoly Power ◽  
Content Type ◽  
The Third ◽  
Corporate Insiders ◽  
Conceptual Paper ◽  
Practical Implications

Purpose The purpose of this paper is to uncover the essence of insider trading, explain why insider trading law is ineffective and provide implications of the effectiveness of the law. Design/methodology/approach This conceptual paper offers three propositions. The first two are based on a literature review of 62 articles in empirical research to develop an understanding of the essence of insider trading and identify the areas in which insider trading is ineffective. This analysis is used in the third proposition to provide a direction in suggesting effective measures to improve insider trading law. Findings The essence of insider trading is that corporate insiders exercise informational monopoly power over their trades. This understanding explains why insider trading law is ineffective because it has not taken away the monopoly power that corporate insiders possess and exercise. This understanding also leads to three antitrust suggestions aimed at improving insider trading law. Practical implications The findings may provide assistance to the lawmakers and regulators to make insider trading law more effective and enforcement more simplified. Originality/value This paper is of value to other researchers attempting to understand the essence of insider trading and to policymakers concerned about the existence of monopolistic behavior in the equity market and income inequality due to corporate insiders’ trading profit.

scholarly journals THE IMPACT OF THE FINANCIAL CRISIS ON INSIDER TRADING PROFITABILITY IN BELGIUM

2012 ◽  
Vol 14 (2) ◽  
pp. 364-385 ◽  
Author(s):  
Debby Van Geyt ◽  
Philippe Van Cauwenberge ◽  
Heidi Vander Bauwhede
Keyword(s):  
Financial Crisis ◽  
Insider Trading ◽  
Global Financial Crisis ◽  
Abnormal Returns ◽  
Inside Information ◽  
Corporate Insiders ◽  
Study Methodology ◽  
Fundamental Value ◽  
The Impact ◽  
Financial Environment

The 2007 global financial crisis led to a chaotic financial environment characterized by highly uncertain and volatile stock markets. This created additional uncertainty about the fundamental value of shares and potentially increased the benefit of inside information. In this paper, we use event study methodology to examine whether Belgian corporate insiders were able to benefit from these turbulent market conditions. Given the large weight of financial institutions, the Belgian stock market was especially vulnerable to the financial crisis and provides an interesting environment to test this hypothesis. Our results show that, while insiders are generally able to earn abnormal returns, these returns are significantly higher during the years of the financial crisis.

Sign in / Sign up

Export Citation Format

Share Document