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Do Insider Trading Laws Work?

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  • Arturo Bris

Abstract

This paper presents the first comprehensive global study of insider trading laws and their first enforcement. In a sample of 4,541 acquisitions from 52 countries, I find that insider trading enforcement increases both the incidence, and the profitability of insider trading. The expected total insider trading gains increase. Consequently, laws that proscribe insider trading fail to eliminate insider profits. However, harsher laws work better at reducing the incidence of illegal insider trading.

Suggested Citation

  • Arturo Bris, 2005. "Do Insider Trading Laws Work?," European Financial Management, European Financial Management Association, vol. 11(3), pages 267-312, June.
    • Handle: RePEc:bla:eufman:v:11:y:2005:i:3:p:267-312
    DOI: 10.1111/j.1354-7798.2005.00285.x
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