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 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.

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

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 and the Exploitation of Inside Information: Some Empirical Evidence

1985 ◽  
Vol 58 (1) ◽  
pp. 69 ◽  
Author(s):  
Dan Givoly ◽  
Dan Palmon
Keyword(s):  
Empirical Evidence ◽  
Insider Trading ◽  
Inside Information

scholarly journals Take-over announcements and insider trading activity on the Johannesburg Stock Exchange

1987 ◽  
Vol 18 (4) ◽  
pp. 198-208 ◽  
Author(s):  
N. Bhana
Keyword(s):  
South Africa ◽  
Insider Trading ◽  
Abnormal Return ◽  
Stock Exchange ◽  
Third Parties ◽  
Inside Information ◽  
The Public ◽  
Public Announcement ◽  
Johannesburg Stock Exchange ◽  
Announcement Date

The objective of this study was to carry out an investigation into the abnormal return behaviour of a sample of 50 acquired companies on the Johannesburg Stock Exchange during the period 1976-1985. Insiders appear to take market positions on prospective take-overs approximately 40 trading days before the announcement, and there appears to be uncontrolled abuse of insider trading rules in the 15 days immediately prior to the take-over announcement date. Legally defined insiders were not responsible for the abuse of inside information relating to the proposed take-overs. It would seem that substantial insider trading is carried out through third parties in order to escape detection of the authorities. The JSE appears to be inefficient in reacting to the public announcement of a planned take-over, and Section 233 of the Companies Act which regulates insider trading in South Africa is clearly ineffective. Various deficiencies and loopholes in the existing legislation are identified and recommendations for amendments are suggested.

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 European Insider Trading Theory Revisited: The Limits of the Parity-of-Information Theory and the Application of the Property Rights in Information Theory to Activist Investment Strategies

2020 ◽  
Vol 17 (5) ◽  
pp. 558-600
Author(s):  
Ana Taleska
Keyword(s):  
Information Theory ◽  
Property Rights ◽  
Insider Trading ◽  
Public Information ◽  
Investment Strategies ◽  
The European Union ◽  
Inside Information ◽  
Market Participants ◽  
Trade Offs ◽  
Securities Trading

AbstractParity-of-information is purported to be the single overarching policy rationale for the European Union (EU) regulation on insider trading. This is because securities trading on the basis of informational advantages is generally prohibited under EU rules, as is tipping (and issuers’ selective disclosure) of material, non-public information. Yet, EU regulations allow market actors, including investment professionals and analysts, that have discovered valuable information -and thereby, have an informational advantage vis-à-vis their trading counterparties- to trade on this information. Relatedly, issuers of financial instruments, takeover bidders and merging parties can share information with a selected group of investors prior to public announcement of the transaction (market sounding), whereas firms can delay public disclosure of inside information and prevent all other market participants from trading on this information. I argue that these exceptions from the parity-of-information theory are -from a doctrinal standpoint- best explained as property rights in information of market actors that have developed new proprietary information with respect to European listed securities. This article, therefore, aims at providing a property rights account of the exceptions to the parity-of-information theory and it illustrates the trade-offs between the parity-of-information and the property rights in information theories underlying European insider trading rules. By extension, I analyze the specific case of activist campaigns as inside information and argue that it would be consistent with the property rights approach to allow activist investors to share their investment and trading strategies with other market participants that further their activist agenda.

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.

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