Abstract
This paper empirically examines whether insider trading sanctions in the USA in the 1980s reduced insider trading in advance of mergers and acquisitions (M&A). Using a sample consisting of 291 firms, both merged and non-merged in 1983 and 1989, I measured insider trading volume and the 'news media effect.' I conclude that the sanctions reduced insider trading on average, and also resulted in larger noise trading on M&A-related news and rumors. No evidence was found that insiders were increasingly camouflaging their trades by concentrating them on days on that they knew trading volume would be abnormally high, such as on days containing M&A-related news.
Original language | English |
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Pages (from-to) | 417-444 |
Number of pages | 28 |
Journal | Asia-Pacific Journal of Financial Studies |
Volume | 39 |
Issue number | 4 |
DOIs | |
State | Published - Aug 2010 |
Keywords
- Abnormal trading
- Insider-trading
- Insider-trading sanctions
- Mergers and acquisitions
- News media effect