In the Insider Trading & Market Manipulation Literature Watch, members of our Finance Practice provide summaries and links to published research about insider trading and market manipulation. The team provides an update each quarter.
The authors’ own abstracts are included in the newsletter and are unedited. Links to the full paper are provided. The inclusion of a paper in this newsletter does not signify that CRA or any of its experts agree or disagree with the content or conclusions therein.
In this Q3 2023 edition, we include a paper examining investigations by the SEC’s Division of Enforcement offices indicating that busy SEC offices are less likely to pursue cases with the largest shareholder losses, which is inconsistent with SEC priorities; a piece proposing a simple approach to synthesize presumably information-driven insider trading signals for the cross-section of stocks; a study on the relationship between narcissistic CEOs and their engagement in opportunistic insider trading that collectively highlights narcissism as a significant personality trait that drives CEOs’ opportunistic insider trading behaviors, contributing to a deeper understanding of corporate governance dynamics; and a paper where using a comprehensive, global sample of prosecuted cases and out-of-sample cross-validation tests, the authors find that the best empirical indicators of spoofing include unbalanced order book quotes, high order activity, abnormal order cancellations, as well as cyclical patterns in market depth and cancellations.
Read the newsletter here.
