Tag: Studies

Legal Risk and Insider Trading

… Specifically, do illegally informed traders rationally internalize legal risks? If so, is this process reflected in their trades and prices? While addressing these issues is vital to assess insider trading regulations’ effectiveness, one faces a formidable empirical challenge: neither private information nor legal risks are readily observable. To enhance our understanding, we contribute in three ways: We manually collect…

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The SEC’s Efforts To Deter Insider Trading May Just Shift It Around – ProMarket

The United States Congress requires the Securities and Exchange Commission (SEC) to deter market manipulation, such as insider trading, which it achieves through calibrated remedies for harmful behavior. As the SEC stated in its 2015 annual report regarding insider trading, rigorous enforcement actions send “a strong message of deterrence to would-be violators.” Despite the SEC’s commitment to fair markets and…

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Using ETFs to Conceal Insider Trading by Elza Eglite, Dans Štaermans, Vinay Patel and Talis Putninš — SSRN

We show that exchange traded funds (ETFs) are used in a new form of insider trading known as “shadow trading.” Our evidence suggests that some traders in possession of material non-public information about upcoming M&A announcements trade in ETFs that contain the target stock, rather than trading the underlying company shares, thereby concealing their insider trading. Using bootstrap techniques to…

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Securities Suit Filings at Historically High Levels During 2017 | The D&O Diary

More securities class action lawsuits were filed in 2017 than in any year since 2001, in significant part because of the substantial number of federal court merger objection lawsuit filings during the year. But even disregarding the merger suits and looking only at the traditional securities lawsuits, the number of lawsuit filings was at the highest level since at least…

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Securities Suit Filings at Historically High Levels During 2017 | The D&O Diary

More securities class action lawsuits were filed in 2017 than in any year since 2001, in significant part because of the substantial number of federal court merger objection lawsuit filings during the year. But even disregarding the merger suits and looking only at the traditional securities lawsuits, the number of lawsuit filings was at the highest level since at least…

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CFOs With Big Signatures More Likely to Misreport — CFO.com

Regulators on the lookout for financial misreporting may have a new investigative weapon — the size of the CFO’s signature. According to a new study, finance chiefs who are narcissistic are more likely to engage in misreporting and if they have large, self-important signatures, that “predicts misreporting” through the association of signature size with narcissism. via CFOs With Big Signatures More…

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