Do Criminal Sanctions Deter Insider Trading?

“ Does Shareholder Litigation Deter Insider Trading ? ” on

This paper examines the possible deterrent effect of actual shareholder litigation on insider trading behavior for both defendant firms and their industry peers. We construct a composite index to capture the strength of a lawsuit as reflected in its merits and the rigorousness of the litigation process. Using a large litigation sample from 1996 to 2009, we find a significant decrease in the int...

Insider Trading and Innovation

This paper assesses whether the enforcement of insider trading laws increases or decreases patent-based measures of technological innovation. Based on about 75,000 industry-countryyear observations across 94 economies from 1976 to 2006, we find evidence consistent with the view that enforcing insider trading laws spurs innovation—as measured by patent intensity, scope, impact, generality, and o...

Opportunistic insider trading☆

Article history: Received 22 June 2011 Accepted 23 July 2012 Available online 31 July 2012 This study proposes a simple framework to disentangle insiders' opportunistic trade from liquidity trade. An opportunistic trade occurswhen the probability of informed trading and the speed of convergence to market efficiency increase in a month of an insider transaction. Using Thailand Securities Exchang...

Prioritizing Enforcement in Insider Trading

Insider Trading with Stochastic Valuation†

This paper studies a model of strategic trading with asymmetric information of an asset whose value follows a Brownian motion. An insider continuously observes a signal that tracks the evolution of the asset fundamental value. At a random time a public announcement reveals the current value of the asset to all the traders. The equilibrium has two regimes separated by an endogenously determined ...