New Evidence on the Effects of Federal Regulations on Insider Trading: The Insider Trading and Securities Fraud Enforcement Act (ITSFEA)

CFA Digest ◽  
1997 ◽  
Vol 27 (4) ◽  
pp. 3-5 ◽  
Author(s):  
M.E. Ellis
Keyword(s):  
Insider Trading ◽  
Federal Regulations ◽  
Securities Fraud ◽  
New Evidence

Securities Fraud in the International Arena: Unilateral vs. Multilateral Enforcement of Insider Trading Sanctions

1991 ◽  
Vol 30 (1) ◽  
pp. 27-36 ◽  
Author(s):  
Kurt Stanberry ◽  
Barbara Crutchfield George ◽  
Maria Ross
Keyword(s):  
Insider Trading ◽  
Securities Fraud

Market Efficiency and Insider Trading: New Evidence

1988 ◽  
Vol 61 (1) ◽  
pp. 25 ◽  
Author(s):  
Michael S. Rozeff ◽  
Mir A. Zaman
Keyword(s):  
Market Efficiency ◽  
Insider Trading ◽  
New Evidence

scholarly journals Do Proxies for Informed Trading Measure Informed Trading? Evidence from Illegal Insider Trades

2020 ◽  
Vol 10 (3) ◽  
pp. 397-440 ◽  
Author(s):  
Kenneth R Ahern
Keyword(s):  
Insider Trading ◽  
Sampling Bias ◽  
Informed Trading ◽  
Cross Sectional ◽  
Order Imbalance ◽  
Oxford University ◽  
Insider Trades ◽  
Editorial Decision ◽  
New Evidence ◽  
Bid Ask Spreads

Abstract This paper exploits hand-collected data on illegal insider trades to provide new evidence on the ability of a host of standard measures of illiquidity to detect informed trading. Controlling for unobserved cross-sectional and time-series variation, sampling bias, and strategic timing of insider trades, I find that when information is short-lived, only absolute order imbalance and effective spread are statistically and economically robust predictors of illegal insider trading. However, when information is long-lasting, insiders strategically time their trades to avoid illiquidity, and none of the standard measures considered are reliable predictors, including bid-ask spreads, order imbalance, Kyle’s λ, and Amihud illiquidity. (JEL D53D82G12G14K42) Received: March 14, 2019; Editorial decision: February 18, 2020 by Editor Thierry Foucault. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

A Robust Multivariate Outlier Detection Method for Detection of Securities Fraud

2020 ◽  
Vol 7 (3) ◽  
pp. 12-29
Author(s):  
M. Fevzi Esen
Keyword(s):  
Outlier Detection ◽  
Insider Trading ◽  
Business Intelligence ◽  
Abnormal Returns ◽  
Detection Methods ◽  
Financial Fraud ◽  
Securities Markets ◽  
Securities Fraud ◽  
Minimum Covariance Determinant ◽  
Minimum Volume Ellipsoid

Insider trading is one the most common deceptive trading practice in securities markets. Data mining appears as an effective approach to tackle the problems in fraud detection with high accuracy. In this study, the authors aim to detect outlying insider transactions depending on the variables affecting insider trading profitability. 1,241,603 sales and purchases of insiders, which range from 2010 to 2017, are analyzed by using classical and robust outlier detection methods. They computed robust distance scores based on minimum volume ellipsoid, Stahel-Donoho, and fast minimum covariance determinant estimators. To investigate the outlying observations that are likely to be fraudulent, they employ event study analysis to measure abnormal returns of outlying transactions. The results are compared to the abnormal returns of non-outlying transactions. They find that outlying transactions gain higher abnormal returns than transactions that are not flagged as outliers. Business intelligence and analytics may be a useful strategy for detecting and preventing of financial fraud for companies.

scholarly journals New Evidence On The Effectiveness Of The Insider Trading Sanctions Act Of 1984

2011 ◽  
Vol 17 (2) ◽  
Author(s):  
Michael Gombola ◽  
Hei Wai Lee ◽  
Feng-Ying Liu
Keyword(s):  
Insider Trading ◽  
Strong Evidence ◽  
Trading Behavior ◽  
Font Size ◽  
Limited Evidence ◽  
Seasoned Equity Offering ◽  
New Approach ◽  
Announcement Date ◽  
New Evidence ◽  
Equity Offering

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="letter-spacing: -0.15pt;"><span style="font-size: x-small;"><span style="font-family: Batang;">This study examines the effectiveness of the Insider Trading Sanctions Act (ITSA) of 1984 by employing a new approach. This approach examines the effect of ITSA in changing insider trading behavior around seasoned equity offering (SEO) announcements. Results of this study provide strong evidence of deferred net selling by insiders until after the SEO announcement date. Deferred net selling is evident for both the pre-ITSA and post-ITSA periods. We find limited evidence showing that the deferred net selling is significantly increased after passage of ITSA. Any effect of ITSA predominantly affects broad trading, rather than concentrated trading.</span></span></span></p>

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