Academic literature on the topic 'Insider transactions'

<p>Although there are as many trading strategies as there are people in this world, the traditional opinion is that investments should be based on sound fundamental analysis which in turn is partly based on information that by law should be given to the financial market without delay. The Efficient Market Hypothesis (EMH) states that prices quickly adjust to new information and that current prices are accurately reflected by all the information about the asset in question (Fama, 1970). Thus, no investor should have an advantage in forecasting future stock prices since no one is supposed to have access to information that has not already been made public. But what if the markets do not apprehend important information immediately? What if there are asymmetries that are being taken advantage of? The aim of our Master thesis was to study the phenomena of Insider trading and the potential abnormal returns these may cause. In other words, the question we asked was whether replicating Insiders is a good trading strategy? The findings from our comprehensive study and its results speak of a considerable high abnormal return. The following computations of the statistical significance of our results further reinforce the credibility in them. This implies, in contrast to other similar studies made in Sweden, that it in fact is possible to gain on Insider trading.</p>

This paper investigates how CEOs in public Swedish mid-cap corporations time their transactions in their own company’s stock in a short-term perspective. To investigate this, an event study methodology is employed on cumulative returns surrounding these insiders’ transactions, both absolute and relative to the market. We find that these insiders, on average, purchase stock subsequent to a period of decline in both total and abnormal cumulative returns and sell stock following a period of positive total and abnormal returns. This is in line with our hypotheses. We also find that total and abnormal cumulative returns tend to turn and increase for a short period following a purchase transaction, while for a sale transaction, the trend does not turn but continues upward, implying that purchases may be timed more rigorously in the short run than sales. This paper discusses these observations in connection to earlier findings and motivates further research on the subject of insider transaction timing.

The aim of this master&rsquo<br>s thesis is to estimate the return performance of insiders (persons or firms liable for announcing their transactions to the public in accordance with the Capital Markets Board decrees) from their transactions and assess whether outsiders can earn abnormal returns by following reported insider transactions. In the study, Rolling Portfolio Approach has been implemented. As a result of the analysis made, when the purchases and sales of insiders are considered together, it has been observed that they, generally, cannot earn abnormal positive returns from their transactions or that they earn positive abnormal returns in the short periods that follow their transactions. When the returns of the portfolios consisting of stocks of which the insiders are the net purchasers or net sellers are taken into consideration, it has been perceived that the portfolios made up of stocks of which the insiders are net buyers cannot earn daily positive abnormal returns or that they earn daily positive abnormal returns in the short periods following their transactions. In the meantime, net sale portfolios earn statistically significant abnormal negative returns over longer holding periods. On the other hand, it has been perceived that investors replicating insider transactions, in general, cannot earn abnormal returns by employing an investment strategy founded on following the purchases and sales of insiders together. Moreover, it has been observed that an investment strategy based on buying the stocks of which the insiders are the net purchasers does not bring abnormal positive returns or that it can bring abnormal positive returns in the brief periods after the transactions. In contrast, it has been observed that, generally, in the sample period analyzed in the study, by avoiding buying or selling stocks of which the insiders are the net sellers, outsiders can evade daily negative abnormal returns. Findings of this thesis have important implications for the efficiency of the Istanbul Stock Exchange. Results indicate that the Istanbul Stock Exchange is not Semi Strong or Strong Form Efficient.

I have examined the common stock investments made by members of the U.S. Senate between 2006 and 2009. I find that the average stock portfolio in the Senate exhibits one and two year cumulative abnormal returns (CARs) of -0.15 % and 0.43%, respectively. This suggests that members of the Senate are not trading on insider knowledge as indicated by one previous researcher who calculated a one year CAR of 25%. However, my findings are in line with another previous researcher who found a one year CAR of about -2% and concluded that Congressmen are not trading on inside information. I also examine election-year trades made by senators who lose a reelection bid. This cashing out effect amounts to a CAR of 0.43% during the first year post loss, but after two years these trades exhibit a CAR of -0.03%. The cashing out group performs no better than the group as a whole, indicating that this group did not use their informational advantage to profit during the lame duck session.

Using data on all lending deals in the Brazilian stock market from 2009 to 2011, we provide answers to the following questions: i) are short-sellers informed in Brazil?, ii) which short sellers are informed?, and iii) how are they informed? The answer to the first question is positive, the average Brazilian short-seller is informed. Among these short-sellers, individual investors appear to be as informed as investment funds. To provide an answer to the third question, the approach is to observe how short-selling behaves around days when relevant corporate news is disclosed. This paper shows that funds are more informed just after the disclosure of news, an indication that these investors decide their short-selling operations after processing the news. On the other hand, individual investors increase short-selling prior to bad news and decrease short-selling prior to good news. This last result could be a sign of information leakages from insiders.<br>Usando-se de dados relativos à totalidade dos contratos de empréstimos de ações no mercado brasileiro de 2009 a 2011, este trabalho responde às seguintes questões: i) vendedores a descoberto são mais informados no Brasil?, ii) quais desses vendedores a descoberto são informados?, e iii) como eles são informados? A resposta para a primeira pergunta é positiva: o investidor médio brasileiro é informado. Dentre esses, vendedores a descoberto individuais são tão informados quanto aqueles institucionais. Para responder a terceira pergunta, nossa abordagem é a de observar como a venda a descoberto se comporta ao redor de dias onde notícias corporativas são reveladas. Este trabalho mostra que fundos institucionais são mais informados logo depois da divulgação da notícia, um indicativo que estes investidores vendem a descoberto após processar notícias. Por outro lado, investidores individuais aumentam a venda a descoberto antes de notícias ruins, e diminuem antes de notícias boas.

The use cases of Information Extraction (IE) are more or less endless, often consisting of a combination of Named Entity Recognition (NER) and Relation Extraction (RE). One use case of IE is the extraction of transaction information from Norwegian insider transaction Press Releases (PRs), where a transaction consists of at most four entities: the name of the owner performing the transaction, the number of shares transferred, the transaction date, and the price of the shares bought or sold. The relationships between the entities define which entity belongs to which transaction, and whether shares were bought or sold. This report has investigated how a pair of supervised NER and RE models extract this information. Since these Norwegian PRs were not labeled, two different approaches to annotating the transaction entities and their associated relations were investigated, and it was found that it is better to annotate only entities that occur in a relation than annotating all occurrences. Furthermore, the number of PRs needed to achieve a satisfactory result in the IE pipeline was investigated. The study shows that training with about 400 PRs is sufficient for the results to converge, at around 0.85 in F1-score. Finally, the report shows that there is not much difference between a complex RE model and a simple rule-based approach, when applied on the studied corpus.

This book deals with the inner life of the capitalist firm. There we find numerous conflicts, the most important of which concerns the individual employment relationship which is understood as a principal-agent problem between the manager, the principal, who issues orders that are to be followed by the employee, the agent. Whereas economic theory traditionally analyses this relationship from a (normative) perspective of the firm in order to support the manager in finding ways to influence the behavior of the employees, such that the latter – ideally – act on behalf of their superior, this book takes a neutral stance. It focusses on explaining individual behavioral patterns and the resulting interactions between the actors in the firm by taking sociological, institutional, and above all, psychological research into consideration. In doing so, insights are gained which challenge many assertions economists take for granted.

The purpose of this study is to develop deeper understanding of the informal contributions of employees to organisational success; more specifically, the exchange ‘mechanism’ by which resources accrue to organisations through the social relationships of their members. The second purpose is to explore the influence of organisational contextual factors on this exchange mechanism; more specifically, the influence – if any – of contingent employment practices. Through the use of a qualitative research design, I have gained an in-depth understanding of the cognitive mechanism employed by organisational actors to arrive at a decision on whether or not to initiate social exchange, in order to facilitate the flow of organisational social capital. Data was analysed using Dimensional Analysis method. This analysis draws on the theoretical perspectives of interpretivism and symbolic interactionism, both of which are underpinned by a social construction epistemology. This provides the necessary link for understanding the connections between macro- and micro-level social action of social exchange in organisational settings. My findings identify a complex cognitive process employed by actors for the purpose of reaching a decision with respect to initiating social exchange in organisational settings. This process is termed Social Exchange Transaction Analysis. It is undertaken at the individual level and ultimately controls the flow of organisational social capital through a social network to the organisation. This complexity is a reflection of both the many dimensions of the phenomenon, and the interconnectedness and interactions between them. Social Exchange Transaction Analysis builds an ‘analytical’ picture of the potential social exchange transaction, to enable the organisational actor to arrive at a decision on whether or not to initiate social exchange – and thereby facilitate the flow of organisational social capital.

碩士<br>國立交通大學<br>管理學院科技法律學程<br>100<br>This paper analyzes: to date, in insider trading cases linked to material information of “mergers and acquisitions”, the “timing of material information” as decided by the relevant court and the reasoning thereof, so as to observe the trend of legal practice in Taiwan and to provide an overview and commentary thereof, with a view to benefit the research regarding insider trading regulations in Taiwan. This paper is divided into four chapters. Chapter 1 explains the purpose and motive, methodology and structure of the research; Chapter 2 provides an introduction of the basic regulatory framework and background regarding the two major subjects surrounding the center of this research: “material information in insider trading” and “mergers and acquisitions”. Three perspectives are addressed: (1)“determination of material information” under Taiwan’s insider trading regulations, (2) the regulations, types and stages for mergers and acquisitions and (3) the development of U.S. legal practices related to insider trading cases related business mergers and acquisitions. Chapter 3 is the center of this research. A searches based “insider trading cases related to mergers and acquisitions” decided courts of first instance”, 11 cases were selected and organized as described therein, each with a brief overview of the related facts and reasoning described in the relevant decision of the court of each level. Based on the above, a summary and commentary of the view expressed by legal practice then follows. Through summarizing and analyzing the reasoning behind such court decisions, this paper finds that the conventional view of the legal practice no longer takes an absolute dichotomous approach in recognizing the “Certainty theory” with respect to determination of material information. In addition to introducing the “Probabilty/Magnitude threshold” used in the U.S. “Basic Inc. V. Levinson”Case, the view of the legal practice in Taiwan also adopted “substantive agreement on material issues” and “news chain” theories with respect to determination of material information, which theories are cited in numerous decisions. However, it must be noted that, in a merger and acquisition context, discrepancies among cases with respect to timing of material information is inevitable. The courts should carefully review the variables in each specific case and evaluate the facts as a whole, and it is not possible to dogmatically adopt the so-called “Bright-Line rule”. Thus, this paper further proposes the concept of differentiating among “types of mergers and acquisitions” as the reference base for determining such type of material information, and suggest that the courts must be more prudent in handling disputes in connection with “scope of knowledge” and “the element of materiality in insider trading” , with a hope that, through collating relevant views of the legal practice to date, a more clear path for the development of Taiwan’s regulatory framework of insider trading could be built. Based on the above, Chapter 4 recapitulates the conclusion of this thesis.