Do voluntary corporate restrictions on insider trading eliminate informed insider trading

We investigate whether voluntary corporate restrictions on insider trading effectively prevent insiders from exploiting their private information. Our results show that insiders of firms with seeming restrictions on insider trading continue to take advantage of positive private information while bei...

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Main Authors: LEE, Inmoo, LEMMON, Michael, LI, Yan, SEQUEIRA, J. M.
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Language:English
Published: Institutional Knowledge at Singapore Management University 2014
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Online Access:https://ink.library.smu.edu.sg/lkcsb_research/5032
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Institution: Singapore Management University
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spelling sg-smu-ink.lkcsb_research-60312017-01-09T06:12:06Z Do voluntary corporate restrictions on insider trading eliminate informed insider trading LEE, Inmoo LEMMON, Michael LI, Yan SEQUEIRA, J. M., We investigate whether voluntary corporate restrictions on insider trading effectively prevent insiders from exploiting their private information. Our results show that insiders of firms with seeming restrictions on insider trading continue to take advantage of positive private information while being more cautious when exploiting negative private information. The results suggest that insiders continue to exploit their informational advantages in a way that minimizes their legal risk. We also find that the degree of information asymmetry is significantly lower in firms with restriction policies and that corporate governance significantly affects firms' decisions to adopt these policies. 2014-12-01T08:00:00Z text https://ink.library.smu.edu.sg/lkcsb_research/5032 info:doi/10.1016/j.jcorpfin.2014.07.005 Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University Corporate governance Information asymmetry Insider trading Profitability of insider trading Voluntary corporate restrictions Corporate Finance
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Corporate governance
Information asymmetry
Insider trading
Profitability of insider trading
Voluntary corporate restrictions
Corporate Finance
spellingShingle Corporate governance
Information asymmetry
Insider trading
Profitability of insider trading
Voluntary corporate restrictions
Corporate Finance
LEE, Inmoo
LEMMON, Michael
LI, Yan
SEQUEIRA, J. M.,
Do voluntary corporate restrictions on insider trading eliminate informed insider trading
description We investigate whether voluntary corporate restrictions on insider trading effectively prevent insiders from exploiting their private information. Our results show that insiders of firms with seeming restrictions on insider trading continue to take advantage of positive private information while being more cautious when exploiting negative private information. The results suggest that insiders continue to exploit their informational advantages in a way that minimizes their legal risk. We also find that the degree of information asymmetry is significantly lower in firms with restriction policies and that corporate governance significantly affects firms' decisions to adopt these policies.
format text
author LEE, Inmoo
LEMMON, Michael
LI, Yan
SEQUEIRA, J. M.,
author_facet LEE, Inmoo
LEMMON, Michael
LI, Yan
SEQUEIRA, J. M.,
author_sort LEE, Inmoo
title Do voluntary corporate restrictions on insider trading eliminate informed insider trading
title_short Do voluntary corporate restrictions on insider trading eliminate informed insider trading
title_full Do voluntary corporate restrictions on insider trading eliminate informed insider trading
title_fullStr Do voluntary corporate restrictions on insider trading eliminate informed insider trading
title_full_unstemmed Do voluntary corporate restrictions on insider trading eliminate informed insider trading
title_sort do voluntary corporate restrictions on insider trading eliminate informed insider trading
publisher Institutional Knowledge at Singapore Management University
publishDate 2014
url https://ink.library.smu.edu.sg/lkcsb_research/5032
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