This paper investigates the patterns of directors' trades and returns around takeover announcements. We find that the pre-announcement net value (the difference between buy value and sell value) of directors' trading is positively related to acquirers' announcement period abnormal returns. This...

Disclosure of insider trading are ambiguous pieces of information, as liquidity traders may not assess whether the trades are motivated by significant privileged information related to the true share value. This paper establishes an algorithm, relying on Bayesian inference that represents the...

We investigate patterns of abnormal stock performance around insider trades and option exercises on the Dutch market. Listed firms in the Netherlands have a long tradition of employing many anti-shareholder mechanisms limiting shareholders rights. Our results imply that insider transactions are...

This paper uses a regression discontinuity design to identify the effect of missing relative performance goals on insider trading. I find that CEOs who narrowly miss relative performance goals and hence receive a lower pay earn higher profits from their insider trades subsequent to the...

We contribute to the M&A literature by characterizing the information available to insiders of selling firms during the pre-public takeover negotiations by analyzing insider trading during this period. We show that target insiders increase their net purchases only once bidders start signing...

We examine whether foreign investors play a role in mitigating opportunistic insider trading. Using a novel global insider trading dataset containing 35,557 firms from 26 countries, we find that greater foreign institutional ownership significantly reduces insider trading profitability, above...

We examine whether shareholder litigation deters informed insider trading, utilizing the staggered adoptions of Universal Demand (UD) laws by different states. The UD laws substantially raise the hurdle for shareholders to file derivative litigation. We find that corporate insiders significantly...

We study whether firms that voluntarily restrict insider trading have lower incentives for earnings management. Using a large sample of US firms, we measure these restrictions based on the extent to which insider transactions happen shortly after quarterly earnings announcements. We find that...

Despite abundant empirical evidence of informed trading ahead of major corporate events, no such evidence has been reported in the case of corporate spinoff (SP) announcements. This is surprising, as SP announcements are unexpected, and are also associated with a positive price jump in the...