Insider Trading: What Really Protects U.S. Investors? Pubblico

Abstract

I examine the ability of the U.S. investor protection regime to limit insider trading returns in a setting absent Section 16(b) of the Securities Exchange Act of 1934 (the short swing rule). I find that U.S. insiders in this setting execute short swing trades that (1) beat the market by about 15 basis points per day and (2) occur with remarkably high frequency around earnings surprises. These results indicate that the bright-line rule restricting short horizon roundtrip insider trading plays a substantial role in protecting outside investors from privately informed insiders in the United States.

Table of Contents

CONTENTS DISSERTATION 1. Introduction 1

2. Background and Literature Review 4

3. Empirical Approach 9

4. Results 12

5. Robustness Tests 21

6. Conclusion 27 7. References 30 TABLES

Table 1 36

Table 2 37

Table 3 38

Table 4 39

Table 5 40

Table 6 42

Table 7 44

Table 8 45

Table 9 46

Table 10 48

APPENDICES

Dissertation Appendix 49

About this Dissertation

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School	Laney Graduate School
Department	Business
Degree	PhD
Submission	Dissertation
Language	English
Research Field	Law Economics, Finance Business Administration, Accounting
Parola chiave	short swing Section 16(b) insider trading
Committee Chair / Thesis Advisor	Dichev, Ilia, Emory University
Committee Members	Owens, Edward, Emory University Green, Clifton, Emory University

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