Abstract
We document a strong link between retail investor attention and opportunistic insider trading. An increase (decrease) in retail attention on a stock is associated with significantly more insider selling (buying). Compared to other types of insider trades, trades that are associated with investor attention generate substantially higher returns. Attention-related insider sales are also associated with a lower risk of SEC investigation and tend to increase following news releases regarding SEC enforcement actions. The results are stronger for lottery stocks, for nonindependent insider directors, and for firms that exhibit weaker governance and poorer social responsibility.
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