Enforcement of Insider Trading Restrictions

1980 ◽  
Vol 66 (1) ◽  
pp. 1 ◽  
Author(s):  
Michael P. Dooley
Keyword(s):  
Insider Trading ◽  
Trading Restrictions

Does board independence constrain insider opportunism?

2020 ◽  
pp. 031289622094638
Author(s):  
Dewan Rahman ◽  
Robert Faff ◽  
Barry Oliver
Keyword(s):  
Research And Development ◽  
Insider Trading ◽  
Jel Classification ◽  
Independent Directors ◽  
Board Independence ◽  
Exogenous Shocks ◽  
Sarbanes Oxley ◽  
Trading Restrictions ◽  
The Impact ◽  
Identification Strategy

We examine whether insider opportunism is reduced by board independence. Using a sample of 18,194 firm-year observations over the period 1996–2016, we show that board independence constrains opportunistic insider trading. Our identification strategy uses the Sarbanes–Oxley Act of 2002 (SOX Act) and associated changes to the listing rules of NYSE/NASDAQ as a source of exogenous shocks in board independence. Our results are economically significant as insider opportunism declines by about 10.5%. We find that insider trading restrictions is the channel through which board independence reduces insider opportunism. Our additional analyses show that in competitive and R&D (research and development) intensive firms, the impact of board independence on opportunism is less pronounced. We also find that board independence constrains opportunism only in less complex firms. However, in co-opted boards, independent directors are less effective. Overall, we support the monitoring channel of board independence for reducing insider opportunism. JEL Classification: G14, G34, G40

scholarly journals Insider trading restrictions and earnings management

2020 ◽  
Vol 50 (3) ◽  
pp. 205-237
Author(s):  
Beatriz Garcia Osma ◽  
Elvira Scarlat ◽  
Karin Shields
Keyword(s):  
Earnings Management ◽  
Insider Trading ◽  
Trading Restrictions

scholarly journals Insider Trading Restrictions and Analysts' Incentives to Follow Firms

2003 ◽  
Author(s):  
Robert M. Bushman ◽  
Joseph D. Piotroski ◽  
Abbie J. Smith
Keyword(s):  
Insider Trading ◽  
Trading Restrictions
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