Corporate Governance and Opportunistic Insider Trade

• Main Authors: Gunny, Katherine, Ke, Bin, ZHANG, Tracey Chunqi
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2009
• Subjects: informed trading; Managerial Opportunism; shareholder value; Accounting; Business Law, Public Responsibility, and Ethics; Portfolio and Security Analysis
• Online Access: https://ink.library.smu.edu.sg/soa_research/2; http://aaahq.org/AM2009/abstract.cfm?submissionID=2051
• Institution: Singapore Management University

We study the effect of informed trading by U.S. executives on shareholder value. We develop a proxy of insider trading that is driven by management’s private information. We find that our proxy is negatively associated with future earnings performance and contemporaneous stock prices. Our proxy is a...