Insider Trading: Does Being a Neighbor of the Securities and Exchange Commission Matter?

详细信息    查看全文

• 作者：Xuesong Hu ; Xin Wang and Baohua Xin
• 刊名：Managerial and Decision Economics
• 出版年：2017
• 出版时间：March 2017
• 年：2017
• 卷：38
• 期：2
• 页码：144-165
• 全文大小：209K
• ISSN：1099-1468

文摘

Using a perception-based crime deterrence approach, we present evidence that corporate insiders located closer to the Securities and Exchange Commission regional offices trade less frequently on their own company's stocks, while they earn higher abnormal returns from such insider transactions. These results are robust to several additional tests. Our further analysis indicates that such differences in trading profitability are mitigated during the periods of a high level of legal jeopardy such as the periods around earnings announcements and mergers and acquisitions. These findings are consistent with the view that Securities and Exchange Commission oversight has an impact on insiders' trading behavior by influencing their perceptions of sanctions risk. Copyright