Opportunistic insider trading

Tirapat, Sunti; Visaltanachoti, Nuttawat

doi:10.1016/j.pacfin.2012.07.006

Cited by 10 publications

(4 citation statements)

References 27 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…() examining insider trading regulation in emerging markets, Frino et al . () attempting to quantify the extent of illegal insider trading that takes place, Tirapat and Visaltanachoti () examining opportunistic insider trading in Thailand and Goncharov et al . () providing some comparative international evidence on insider trading.…”

Section: Relevance To Practicementioning

confidence: 99%

Fifty years of finance research in the Asia Pacific Basin

Benson

Faff

Smith

2014

Accounting & Finance

View full text Add to dashboard Cite

In this paper, we review the history of scholarly finance research in the Asia Pacific Basin. We do this by analysing the four leading regional finance journals -Accounting and Finance, Australian Journal of Management, International Review of Finance and the Pacific-Basin Finance Journalalong five dimensions. The five dimensions are the most cited papers, noted authors, impact in terms of practice, research areas and a breakdown in terms of the development of the field according to Kuhnian concepts of normal science, anomalies and extraordinary science. We show that the Asia Pacific journals make a crucial contribution to research and practice both in the region and internationally.

show abstract

Section: Relevance To Practicementioning

confidence: 99%

Fifty years of finance research in the Asia Pacific Basin

Benson

Faff

Smith

2014

Accounting & Finance

View full text Add to dashboard Cite

show abstract

“…For each monthly aggregate analyst forecast, we track insider trading activities of the firm up to six months prior to the day the forecast is made. Following Fidrmuc et al (2006), Agrawal and Nasser (2012), Jiang and Zaman (2010), and Tirapat and Visaltanachoti (2013), we track the aggregate purchases and sales by eight key insider categories as reported in SEC Forms 4 and 5 in Thomson One, including CEO, COO, CFO, CB (Chairman of the Board), O (Officers), D (Director), VP and P (President). Given the significant involvement of these insiders in the firm strategic management, their trading activities more likely convey meaningful indications of the firm prospect.…”

Section: Methodsmentioning

confidence: 99%

The information content of managerial insider trading: evidence from analyst forecasts

Esqueda

Ngo

Wang

2021

ARA

View full text Add to dashboard Cite

PurposeThis paper examines the effect of managerial insider trading on analyst forecast accuracy, dispersion and bias. Specifically, the authors test whether insider-trading information is positively associated with the precision of earnings forecasts. In addition, this relationship between Regulation Fair Disclosure (FD) and the Galleon insider trading case is examined.Design/methodology/approachPooled ordinary least squares (Pooled OLS) rregressions with year-fixed effects, firm-fixed effects, and firm-level clustered standard errors are used. Our proxies for forecast precision are regressed on alternative measures of insider trading activities and a vector of control variables.FindingsInsider-trading information is positively associated with the precision of earnings forecasts. Analysts provide better forecast accuracy, less forecast dispersion and lower forecast bias among firms with insider trading in the six months leading to the forecast issues. In addition, bullish (bearish) insider trades are associated with increased (decreased) forecast bias. Insider trading information complements analysts' independent opinion and increases the precision of their forecast.Practical implicationsRegulators may pursue rules that promote the rapid disclosure of managerial insider trades, particularly given the increasing availability of Internet tools. Securities regulators may attempt to increase transparency and enhance the reporting procedures of corporate insiders, for example, using Internet sources with direct release to the public to ensure more timely information dissemination.Originality/valueThe authors document a positive association between earnings forecast precision and managerial insider trading up to six months prior to the forecast issue. This relationship is stronger after the Securities and Exchange Commission (SEC) prohibited the selective disclosure of material nonpublic information through Regulation FD. In addition, the association between insider trading and forecast accuracy has weakened after the Galleon insider trading case.

show abstract

“…Opportunistic insider trading captures a reverse pattern in abnormal returns around an opportunistic insider trade. In particular, one should observe a negative abnormal return prior to an opportunistic insider stock purchase and positive abnormal return subsequently [16]. Opportunistic insiders earn higher returns on their future trades.…”

Section: Indirect Insider Tradingmentioning

confidence: 98%

“…Although insider sales do not always communicate unfavorable information, since sales may meet the liquidity needs of insiders, insider purchases convey positive information about a firm's prospect. There are some studies showing that the indirect insider trading affects future return [16] [2] [5] [8] [1]. Indirect trades are the trading transaction that occurs if the accounts are from the family members.…”

Section: Introductionmentioning

confidence: 99%

The Information Content of Indirect Insider Trading: Empirical Evidence from Vietnam Security Market

Huang¹,

Indajang²

2022

Journal of Applied Finance &Amp; Banking

View full text Add to dashboard Cite

In this paper, we discuss the relationship among indirect insider trading, opportunistic trading and investment horizon in Vietnam security market. Goldie, Jiang, Koch and Wintoki [10] find that in order to camouflage opportunistic trading, insiders trade through the accounts of family members, trusts, and foundations, known as indirect insider trading. According to Cohen, Malloy and Pomorski [5], opportunistic trading are strong predictors of future return. Akbas, Jiang, and Koch [1] document that the performance of short-horizon insiders to forecast future stock prices are better than that of long-horizon insiders since SH insiders are more likely to be unexpected, on average, when compared with the typical expected trade of LH insiders. Empirical results show that the impact of opportunistic trades in indirect insider trading on future return is stronger than that in direct insider trading. In indirect insider trading, the impact of opportunistic trades on future return is still stronger than that of routine trades. Moreover, we find that the impact of short-horizon insiders in indirect insider trading on future return is stronger than that in direct insider trading. In indirect insider trading, the impact of short-horizon insiders on future return is still stronger than that of long-horizon insiders. JEL classification numbers: G11, G14. Keywords: Insider trading, Indirect insider trading, Opportunistic trading, Investment horizon.

show abstract

Opportunistic insider trading

Cited by 10 publications

References 27 publications

Fifty years of finance research in the Asia Pacific Basin

Fifty years of finance research in the Asia Pacific Basin

The information content of managerial insider trading: evidence from analyst forecasts

The Information Content of Indirect Insider Trading: Empirical Evidence from Vietnam Security Market

Contact Info

Product

Resources

About