The DOI matches its Crossref record; 23 of the 23 references it cites were found in a registry or an index.
Decoding Inside Information
Open accessAbstract
Exploiting the fact that insiders trade for a variety of reasons, we show that there is predictable, identifiable “routine” insider trading that is not informative about firms’ futures. A portfolio strategy that focuses solely on the remaining “opportunistic” traders yields value‐weighted abnormal returns of 82 basis points per month, while abnormal returns associated with routine traders are essentially zero. The most informed opportunistic traders are local, nonexecutive insiders from geographically concentrated, poorly governed firms. Opportunistic traders are significantly more likely to have SEC enforcement action taken against them, and reduce trading following waves of SEC insider trading enforcement.
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Citations
Cites
Risk, Return, and Equilibrium: Empirical Tests
Fama, E. F., & MacBeth, J. D. (1973) · Journal of Political Economy · doi:10.1086/260061 · Cited by 14,258
Corporate Governance and Equity Prices
Gompers, P., Ishii, J., & Metrick, A. (2003) · The Quarterly Journal of Economics · doi:10.1162/00335530360535162 · Cited by 6,120
Measuring Mutual Fund Performance with Characteristic‐Based Benchmarks
DANIEL, K., GRINBLATT, M., TITMAN, S., & WERMERS, R. (1997) · The Journal of Finance · doi:10.1111/j.1540-6261.1997.tb02724.x · Cited by 2,778
Special Information and Insider Trading
Jaffe, J. F. (1974) · The Journal of Business · doi:10.1086/295655 · Cited by 1,231
Are Insider Trades Informative?
Lakonishok, J., & Lee, I. (2001) · Review of Financial Studies · doi:10.1093/rfs/14.1.79 · Cited by 1,227
Insiders' profits, costs of trading, and market efficiency
Seyhun, H. N. (1986) · Journal of Financial Economics · doi:10.1016/0304-405x(86)90060-7 · Cited by 1,217
Evidence on the Characteristics of Cross Sectional Variation in Stock Returns
Daniel, K., & Titman, S. D. (1997) · The Journal of Finance · doi:10.2307/2329554 · Cited by 773
What insiders know about future earnings and how they use it: Evidence from insider trades
Ke, B., Huddart, S., & Petroni, K. (2003) · Journal of Accounting and Economics · doi:10.1016/s0165-4101(03)00036-3 · Cited by 626
Piotroski, J. D., & Roulstone, D. T. (2005) · Journal of Accounting and Economics · doi:10.1016/j.jacceco.2004.01.003 · Cited by 565
Estimating the Returns to Insider Trading: A Performance-Evaluation Perspective
Jeng, L. A., Metrick, A., & Zeckhauser, R. (2003) · Review of Economics and Statistics · doi:10.1162/003465303765299936 · Cited by 553
Cited by
… and the Cross-Section of Expected Returns
Harvey, C. R., Liu, Y., & Zhu, H. (2016) · Review of Financial Studies · doi:10.1093/rfs/hhv059 · Cited by 2,119
Accountability of independent directors: Evidence from firms subject to securities litigation
Brochet, F., & Srinivasan, S. (2014) · Journal of Financial Economics · doi:10.1016/j.jfineco.2013.10.013 · Cited by 265
The unintended consequences of divestment
Davies, S. W., & Van Wesep, E. D. (2018) · Journal of Financial Economics · doi:10.1016/j.jfineco.2018.03.007 · Cited by 89
Cheng, C., Jones, S., & Moser, W. J. (2018) · Journal of Business Finance & Accounting · doi:10.1111/jbfa.12338 · Cited by 20
Metadata
- Authors
- COHEN, L., MALLOY, C., & POMORSKI, L.
- Venue
- The Journal of Finance
- Publisher
- Wiley
- Published
- 2012-05-21
- Volume
- 67
- Issue
- 3
- Pages
- 1009-1043
- ISSN
- 0022-1082 (ISSN-L)
- 1540-6261
- OpenAlex
- W2890190386
- Cited by
- 675
- References
- 23
- FWCI
- 37.68
- Type
- journal article
- Language
- en
- Open access
- green
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Data sources
Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
