Insider Trading Restrictions and Informed Trading in Peer Stocks

Published Online:https://doi.org/10.1287/mnsc.2022.02907

References

  • Adhikari BK , Agrawal A , Sharma B (2021) Does litigation risk deter insider trading? Evidence from universal demand laws. Preprint, submitted June 21, 2019, http://dx.doi.org/10.2139/ssrn.3404720.Google Scholar
  • Alldredge DM , Cicero DC (2015) Attentive insider trading. J. Financial Econom. 115(1):84–101.CrossrefGoogle Scholar
  • Alok S , Ayyagari M (2020) Politics, state ownership, and corporate investments. Rev. Financial Stud. 33(7):3031–3087.CrossrefGoogle Scholar
  • Amihud Y (2002) Illiquidity and stock returns: Cross-section and time-series effects. J. Financial Marketing 5(1):31–56.CrossrefGoogle Scholar
  • Anagol S , Balasubramaniam V , Ramadorai T (2018) Endowment effects in the field: Evidence from India’s IPO lotteries. Rev. Econom. Stud. 85(3):1971–2004.CrossrefGoogle Scholar
  • Anagol S , Balasubramaniam V , Ramadorai T (2021) Learning from noise: Evidence from India’s IPO lotteries. J. Financial Econom. 140(3):965–986.CrossrefGoogle Scholar
  • Baghai RP , Becker B (2018) Non-rating revenue and conflicts of interest. J. Financial Econom. 127(1):94–112.CrossrefGoogle Scholar
  • Bai J , Philippon T , Savov A (2016) Have financial markets become more informative? J. Financial Econom. 122(3):625–654.CrossrefGoogle Scholar
  • Ben-David I , Birru J , Rossi A (2019) Industry familiarity and trading: Evidence from the personal portfolios of industry insiders. J. Financial Econom. 132(1):49–75.CrossrefGoogle Scholar
  • Berkman H , Koch P , Westerholm PJ (2020) Inside the director network: When directors trade or hold inside, interlock, and unconnected stocks. J. Banking Finance 118:105892.CrossrefGoogle Scholar
  • Bhattacharya U , Daouk H (2002) The world price of insider trading. J. Finance 57(1):75–108.CrossrefGoogle Scholar
  • Bhattacharya U , Daouk H (2009) When no law is better than a good law. Rev. Finance 13(4):577–627.CrossrefGoogle Scholar
  • Brochet F (2010) Information content of insider trades before and after the Sarbanes-Oxley Act. Accounting Rev. 85(2):419–446.CrossrefGoogle Scholar
  • Bushman RM , Piotroski JD , Smith AJ (2005) Insider trading restrictions and analysts’ incentives to follow firms. J. Finance 60(1):35–66.CrossrefGoogle Scholar
  • Carlton DW , Fischel DR (1983) The regulation of insider trading. Stanford Law Rev. 35(5):857–895.CrossrefGoogle Scholar
  • Chakravarty S , McConnell JJ (1997) An analysis of prices, bid/ask spreads, and bid and ask depths surrounding Ivan Boesky’s illegal trading in Carnation’s stock. Financial Management 26(2):18–34.CrossrefGoogle Scholar
  • Chakravarty S , McConnell JJ (1999) Does insider trading really move stock prices? J. Financial Quant. Anal. 34(2):191–209.CrossrefGoogle Scholar
  • Chen H , Jorgensen BN (2021) Insider trading, competition, and real activities manipulation. Management Sci. 68(2):1497–1511.LinkGoogle Scholar
  • Choi L, Faurel L, Hillegeist SA (2023) Insider trading, future earnings and post-earnings announcement drift. J. Account. Public Policy 42(4):107117.Google Scholar
  • Chopra Y , Subramanian K , Tantri PL (2021) Bank cleanups, capitalization, and lending: Evidence from India. Rev. Financial Stud. 34(9):4132–4176.CrossrefGoogle Scholar
  • Cornell B , Sirri ER (1992) The reaction of investors and stock prices to insider trading. J. Finance 47(3):1031–1059.CrossrefGoogle Scholar
  • Cziraki P , De Goeij P , Renneboog L (2014) Corporate governance rules and insider trading profits. Rev. Finance 18(1):67–108.CrossrefGoogle Scholar
  • Dai L , Fu R , Kang JK , Lee I (2016) Corporate governance and the profitability of insider trading. J. Corporate Finance 40:235–253.CrossrefGoogle Scholar
  • Damle D, Zaveri B (2022) Enforcement of securities laws in India: An empirical overview. Preprint, submitted September 1, http://dx.doi.org/10.2139/ssrn.4198772.Google Scholar
  • Daniel K , Grinblatt M , Titman S , Wermers R (1997) Measuring mutual fund performance with benchmarks. J. Finance 52(3):1035–1058.CrossrefGoogle Scholar
  • Del Guercio D , Odders-White ER , Ready MJ (2017) The deterrent effect of the Securities and Exchange Commission’s enforcement intensity on illegal insider trading: Evidence from run-up before news events. J. Law Econom. 60(2):269–307.CrossrefGoogle Scholar
  • Dey S (2016) Insider trading regime in India: Learning lessons from the US and UK regulatory experience. Bus. Law Rev. 37(1):19–28.CrossrefGoogle Scholar
  • Economic Times (2015) Sebi notifies stringent insider trading norms. Economic Times (January 15), https://economictimes.indiatimes.com/sebi-notifies-stringent-insider-trading-norms/articleshow/45900478.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst.Google Scholar
  • Fernandes N , Ferreira MA (2009) Insider trading laws and stock price informativeness. Rev. Financial Stud. 22(5):1845–1887.CrossrefGoogle Scholar
  • Fishman MJ , Hagerty KM (1992) Insider trading and the efficiency of stock prices. RAND J. Econ. 23(1):106–122.CrossrefGoogle Scholar
  • Fisman R , Paravisini D , Vig V (2017) Cultural proximity and loan outcomes. Amer. Econom. Rev. 107(2):457–492.CrossrefGoogle Scholar
  • Fong KYL , Holden CW , Trzcinka CA (2017) What are the best liquidity proxies for global research? Rev. Finance 21(4):1355–1401.CrossrefGoogle Scholar
  • Goyenko RY , Holden CW , Trzcinka CA (2009) Do liquidity measures measure liquidity? J. Financial Econom. 92(2):153–181.CrossrefGoogle Scholar
  • Hasbrouck J (2009) Trading costs and returns for US equities: Estimating effective costs from daily data. J. Finance 64(3):1445–1477.CrossrefGoogle Scholar
  • Holden CW , Subrahmanyam A (1992) Long-lived private information and imperfect competition. J. Finance 47(1):247–270.CrossrefGoogle Scholar
  • Inci AC , Lu B , Seyhun HN (2010) Intraday behavior of stock prices around insider trading. Financial Management 39(1):323–363.CrossrefGoogle Scholar
  • Iyer R , Puri M (2012) Understanding bank runs: The importance of depositor-bank relationships and networks. Amer. Econom. Rev. 102(4):1414–1445.CrossrefGoogle Scholar
  • Jaffe JF (1974a) Special information and insider trading. J. Bus. 47(3):410–428.CrossrefGoogle Scholar
  • Jaffe JF (1974b) The effect of regulation changes on insider trading. Bell J. Econom. Management Sci. 5(1):93–121.CrossrefGoogle Scholar
  • Jagolinzer AD , Larcker DF , Taylor DJ (2011) Corporate governance and the information content of insider trades. J. Accounting Res. 49(5):1249–1274.CrossrefGoogle Scholar
  • Johannesson E (2018) Former insiders’ trading. Preprint, submitted November 18, http://dx.doi.org/10.2139/ssrn.3823514.Google Scholar
  • Kacperczyk MT, Pagnotta ES (2024) Legal risk and insider trading. J. Finance 79(1):305–355.Google Scholar
  • Kacperczyk M , Sundaresan S , Wang T (2021) Do foreign institutional investors improve price efficiency? Rev. Financial Stud. 34(3):1317–1367.CrossrefGoogle Scholar
  • Kahraman B , Tookes HE (2017) Trader leverage and liquidity. J. Finance 72(4):1567–1610.CrossrefGoogle Scholar
  • Kallunki JP , Nilsson H , Hellström J (2009) Why do insiders trade? Evidence based on unique data on Swedish insiders. J. Accounting Econom. 48(1):37–53.CrossrefGoogle Scholar
  • Ke B , Huddart S , Petroni K (2003) What insiders know about future earnings and how they use it: Evidence from insider trades. J. Accounting Econom. 35(3):315–346.CrossrefGoogle Scholar
  • Krishnan M , Rangan S (2016) An analysis of corporate insider trading and earnings announcements in India. IIMB Working paper, Indian Institute Of Management Bangalore, Bengaluru, India.Google Scholar
  • La Porta R , Lopez-de-Silanes F , Shleifer A , Vishny RW (1998) Law and finance. J. Political Econom. 106(6):1113–1155.CrossrefGoogle Scholar
  • Lakonishok J , Lee I (2001) Are insider trades informative? Rev. Financial Stud. 14(1):79–111.CrossrefGoogle Scholar
  • Leland HE (1992) Insider trading: Should it be prohibited? J. Political Econom. 100(4):859–887.CrossrefGoogle Scholar
  • Lo AW , MacKinlay AC (1988) Stock market prices do not follow random walks: Evidence from a simple specification test. Rev. Financial Stud. 1(1):41–66.CrossrefGoogle Scholar
  • Manne HG (1966) Insider Trading and the Stock Market (Free Press, New York).Google Scholar
  • Mehta MN , Reeb DM , Zhao W (2021) Shadow trading. Accounting Rev. 96(4):367–404.CrossrefGoogle Scholar
  • Meulbroek LK (1992) An empirical analysis of illegal insider trading. J. Finance 47(5):1661–1699.CrossrefGoogle Scholar
  • Naaraayanan SL , Nielsen KM (2021) Does personal liability deter individuals from serving as independent directors? J. Financial Econom. 140(2):621–643.CrossrefGoogle Scholar
  • Piotroski JD , Roulstone DT (2004) The influence of analysts, institutional investors, and insiders on the incorporation of market, industry, and firm-specific information into stock prices. Accounting Rev. 79(4):1119–1151.CrossrefGoogle Scholar
  • Piotroski JD , Roulstone DT (2005) Do insider trades reflect both contrarian beliefs and superior knowledge about future cash flow realizations? J. Accounting Econom. 39(1):55–81.CrossrefGoogle Scholar
  • Prasad G , Khan S (2015) What Sebi’s new insider-trading rules mean and where they fall short. Mint (March 10), https://www.livemint.com/Money/qMDHjPWNMJLza41fy8LWBO/What-Sebis-new-insidertrading-rules-mean-and-where-they-fa.html.Google Scholar
  • Ravina E , Sapienza P (2010) What do independent directors know? Evidence from their trading. Rev. Financial Stud. 23(3):962–1003.CrossrefGoogle Scholar
  • Seyhun HN (1992) The effectiveness of the insider-trading sanctions. J. Law Econom. 35(1):149–182.CrossrefGoogle Scholar
  • Tookes HE (2008) Information, trading, and product market interactions: Cross-sectional implications of informed trading. J. Finance 63(1):379–413.CrossrefGoogle Scholar
  • Udpa SC (1996) Insider trading and the information content of earnings. J. Bus. Finance Accounting 23(8):1069–1095.CrossrefGoogle Scholar
  • Veenman D (2012) Disclosures of insider purchases and the valuation implications of past earnings signals. Accounting Rev. 87(1):313–342.CrossrefGoogle Scholar
  • Weller BM (2018) Does algorithmic trading reduce information acquisition? Rev. Financial Stud. 31(6):2184–2226.CrossrefGoogle Scholar
  • Wermers RR (2003) Is money really “smart”? New evidence on the relation between mutual fund flows, manager behavior, and performance persistence. Preprint, submitted July 23, http://dx.doi.org/10.2139/ssrn.414420.Google Scholar
  • White RM (2020) Insider trading: What really protects U.S. investors? J. Financial Quant. Anal. 55(4):1305–1332.CrossrefGoogle Scholar
  • Wooldridge JM (2002) Econometric Analysis of Cross Section and Panel Data (MIT Press, Cambridge, MA).Google Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.