This paper investigates market reaction to, and insiders’ trading around, CEO succession events. Investors seem to react negatively to CEO resignation, but not to CEO retirement or death. Further, while investors do not react negatively to CEO turnover in high effective firms, their reaction...

We document pervasive informed trading activity in equity options before M&A announcements. About 25% of takeovers have positive abnormal volumes. These volume patterns indicate that informed traders are likely using bullish directional strategies for the target and volatility strategies for the...

Using a novel dataset containing U.S. companies’ regular board meeting schedules, we find evidence of informed trading by outside directors prior to board meetings. In the days prior to board meetings, when outside directors possess private information, they make purchases that yield higher...

Prior research finds that online social media usage may lower self-control and encourage indulgent behavior in laboratory subjects. We find that corporate CEOs show similar tendencies: CEOs with online social media presence are more likely to succumb to lower self-control and abuse their...

Material private information transmits through social networks. Using manually collected information on networks of alumni reunion cohorts, we show that hedge fund managers connected to directors of firms engaged in merger deals increase call option holdings on target firms before deal...

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...

Theories of corporate boards assume that board members of a firm generate private information about the quality and performance of its CEO in the process of monitoring and advising him, and may use this information to decide whether or not to fire him. In this paper, I make use of data on...

This study examines the effect of tax enforcement on informed trading by corporate insiders. Building on prior work suggesting that the tax authority can discipline managerial misconduct (Dyck and Zingales 2004; Desai, Dyck, and Zingales 2007), we hypothesize that the increased scrutiny from an IRS...

We examine whether Confucianism surrounding corporate headquarters affects informed insider trading. We empirically show that insiders in firms headquartered in regions with higher levels of Confucianism profit more in sales but not in purchases. We further investigate the cross-sectional...

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...