We assess trading and non-trading characteristics of takeovers that trigger Securities and Exchange Commission (SEC) investigations of illegal insider trading. We find that targets with more pronounced abnormal stock price run-ups (especially in long pre-bid windows) and abnormal trading volume...

Information leakages experienced by U.S. targets in the pre-bid period are especially pronounced when they involve foreign bidders whose countries have weak insider trading sanctions, are perceived to have prevalent insider trading activity, have a low level of local merger activity, and are not...