The Deterrent Effect of Insider Trading Enforcement Actions

Autor:	Christo A. Pirinsky, Robert H. Davidson
Rok vydání:	2021
Předmět:	Economics and Econometrics Action (philosophy) Accounting Event (relativity) Conviction Deterrence theory Insider trading Business Monetary economics Enforcement Inside information Finance Insider
Zdroj:	The Accounting Review. 97:227-247
ISSN:	1558-7967 0001-4826
DOI:	10.2308/tar-2020-0003
Popis:	We analyze whether exposure to an SEC insider trading enforcement action affects how insiders trade. We find that following an insider trading enforcement action at one firm, exposed insiders earn significantly lower abnormal profits from their trades at other firms compared to non-exposed insiders. The deterrent effect is stronger when a fellow insider is convicted, and is similarly significant both pre- and post-SOX. Following the enforcement event, exposed insiders do not trade less frequently, but do trade significantly fewer shares per trade. Insiders who have witnessed an enforcement action have a lower probability for future conviction than their unexposed peers. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: G14; G40; K42.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_dedup___::c11b9e3aeb05be3425757057c034757f https://doi.org/10.2308/tar-2020-0003 Zobrazit plný text záznamu