We investigate if prior professional legal education either restrains or increases the extent to which the insider trades of company executives and directors are informed. We show that executives and directors with legal expertise (lawyer-insiders) earn significantly lower abnormal returns than...

Do illegal insiders internalize legal risk? We address this question with hand-collected data from530 SEC investigations. Using two plausibly exogenous shocks to expected penalties, we showthat insiders trade less aggressively and earlier and concentrate on tips of greater value whenfacing...

We examine corporate insider transactions around Sarbanes-Oxley §403 (SOX) regulatory regimes and subsequent Wall Street Journal (WSJ) media postings — and provide new evidence on the benefit/cost trade-off tension between private information transfer and stock trading costs. SOX increased...

We provide evidence of unreported trading by corporate insiders in their own firm's shares and link this activity to future firm earnings and analyst forecast error. Unreported trading represent discrepancies between insider shareholdings from trades they report to the Exchange and their...

The press has given the public the impression that insider trading is evil, unethical and illegal, when in fact such is not always the case. In some cases, insider trading is beneficial to the economy and to shareholders. Whether insider trading is harmful, unethical or illegal depends on many...

We use observed insider trading data to estimate the start and end points of quarterly open trading windows, and find that voluntary insider trading restrictions reflect concerns about information asymmetry, the strength of external monitoring, and executives’ liquidity needs. We also identify...