Abstract
0 Prior studies indicate that insider buying (selling) activity precedes positive (negative) abnormal returns that persist over relatively long horizons.1 Presumably, investors may benefit from knowledge of previous insider trades, and consistent with this, the financial press and investment advisors frequently provide information on insider trading activity.2 Recent efforts to reduce the incidence of insider trading based on non-public information have originated both from regulatory authorities and companies. Congress has passed several new laws regulating insider trading in the past decade, and the SEC has increased its enforcement of insider trading restrictions (see Arshadi and Eyssell [2, pp. 31-2]). Several companies have also adopted policies that restrict insider trading to time periods following news events such as quarterly earnings announcements. For instance, Compaq has a policy that limits insider transactions to the period following quarterly earnings reports (see Heavy Insider Sales are Made at Compaq, The Wall Street Journal, June 9, 1993).3 The intended effect of such policies is presumably to level the playing field between insiders and external investors and ensure that the firm and its officers comply with the law.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
