No description available.

I document that a significant number of insiders violate SEC reporting requirements by filing transactions after the legally required deadline. Although these violations are straightforward for the SEC to detect, instances of reporting violations persist. Prior to Sarbanes-Oxley, 29% of open market transactions fell outside the required reporting window. Following the enactment of SOX, 8% of all transactions continue to violate the filing deadline. During the filing delay trades are unknown to outside market participants and earn significant abnormal returns. I show that almost a quarter of filing violations are made by insiders that egregiously violate the reporting requirement. This subgroup realizes significantly greater abnormal returns for purchases and sales leading up to the reporting date. Most filing violations take place during periods of high information asymmetry, and insiders privately earn significant abnormal returns. Collectively, these findings indicate that a subgroup of insiders extract information rent from private knowledge during windows of unreported trading. The SEC reacts to numerous insiders disregard this reporting requirement by charging a small percentage of the total violators for wrongdoing. I employ a unique data set of SEC cases brought against top managers who fail to meet the filing requirements. By comparing the trades in indictments to similar non-indicted transactions, I assess that the SEC pursues insiders that violate the reporting requirement egregiously and are a manager at larger firms. While the coverage of these actions is thin, it significantly deters insiders from filing late after the enforcement. In addition, firm insiders may trade on private information concerning forthcoming innovations. Before high-quality innovations become public knowledge, I find that insiders significantly increase their holdings in the firm. After a patent for a breakthrough innovation is granted, the firm realizes significant abnormal returns. By insider, I find that members of the Corporate Suite increase their holdings around the application date and are the only insiders that earn significant abnormal returns following the grant date. These results suggest that key insiders can identify breakthrough patents ex-ante and utilize this information advantage before the innovation becomes public knowledge. These innovations translate into an increase in firm value.

Cheuk Man Yin. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2001. / Includes bibliographical references (leaves 87-94). / Abstracts in English and Chinese. / ABSTRACT --- p.i / ACKNOWLEDGEMENT --- p.iv / TABLE OF CONTENTS --- p.v / LIST OF TABLES --- p.viii / Chapter / Chapter I. --- INTRODUCTION --- p.1 / Chapter 1.1 --- Introduction --- p.1 / Chapter 1.2 --- Objectives --- p.5 / Chapter II. --- LITERATURE REVIEW --- p.7 / Chapter 2.1 --- Backgrounds --- p.7 / Chapter 2.1.1 --- Information Content and Predictability of Insider Trading --- p.7 / Chapter 2.1.2 --- "Market Efficiency, Market Liquidity and Insider Trading" --- p.9 / Chapter 2.2 --- Review of Insider Trading Literature --- p.11 / Chapter 2.2.1 --- Review of Studies on the U.S. Market --- p.11 / Chapter 2.2.2 --- Review of Studies on the European and Canadian Markets --- p.17 / Chapter 2.2.3 --- Review of Studies on the Emerging Stock Markets --- p.18 / Chapter III. --- INSIDER TRADING REGULATION IN HONG KONG --- p.20 / Chapter 3.1 --- Backgrounds: Arguments For and Against Insider Trading --- p.20 / Chapter 3.2 --- The Securities (Insider Dealing) Ordinance --- p.22 / Chapter 3.3 --- The Securities (Disclosure of Interests) Ordinance --- p.23 / Chapter IV. --- DATA AND METHODOLOGY --- p.27 / Chapter 4.1 --- Data --- p.27 / Chapter 4.2 --- Statistics on Insider Trading Samples --- p.33 / Chapter 4.2.1 --- Statistics on Entire Sample --- p.33 / Chapter 4.2.2 --- Statistics by Year of Transaction --- p.34 / Chapter 4.2.3 --- Statistics by Calendar Month of Transaction --- p.36 / Chapter 4.2.4 --- Statistics by Day of the Week of Transaction --- p.37 / Chapter 4.2.5 --- Statistics by Industry Classification of the Firm --- p.38 / Chapter 4.2.6 --- Statistics by Size of the Firm --- p.38 / Chapter 4.2.7 --- Statistics by Book-to-Market Ratio of the Firm --- p.39 / Chapter 4.2.8 --- Statistics by Price-Earnings Ratio of the Firm --- p.40 / Chapter 4.2.9 --- Statistics by Relative Trading Volume in Shares --- p.41 / Chapter 4.2.10 --- Statistics by Firm Size and Relative Trading Volume in Shares --- p.43 / Chapter 4.3 --- Methodology --- p.43 / Chapter 4.3.1 --- Measurement of Stock Price Performance for Insider Trading Events --- p.43 / Chapter 4.3.2 --- Aggregate Industry-wide Insider Trading Prior to Major Adjustment in the AOI Sectorial Index --- p.47 / Chapter V. --- EMPIRICAL RESULTS AND DISCUSSIONS --- p.51 / Chapter 5.1 --- Stock Price Performance Around Insider Trading Events: Abnormal Returns and Cumulative Abnormal Returns --- p.51 / Chapter 5.1.1 --- On the Entire Sample --- p.51 / Chapter 5.1.2 --- By Year of Transaction --- p.55 / Chapter 5.1.3 --- By Calendar Month of Transaction --- p.59 / Chapter 5.1.4 --- By Day of the Week of Transaction --- p.61 / Chapter 5.1.5 --- By Industry Classification of the Firm --- p.62 / Chapter 5.1.6 --- By Size of the Firm --- p.64 / Chapter 5.1.7 --- By Book-to-Market Ratio of the Firm --- p.66 / Chapter 5.1.8 --- By Price-Earnings Ratio of the Firm --- p.67 / Chapter 5.1.9 --- By Relative Trading Volume in Shares --- p.69 / Chapter 5.1.10 --- By Firm Size and Relative Trading Volume in Shares --- p.70 / Chapter 5.2 --- Aggregate Industry-wide Insider Trading Prior to Major Adjustment in the AOI Sectorial Index --- p.74 / Chapter 5.2.1 --- Finance Industry --- p.76 / Chapter 5.2.2 --- Utilities Industry --- p.77 / Chapter 5.2.3 --- Properties Industry --- p.78 / Chapter 5.2.4 --- Consolidated Enterprises Industry --- p.80 / Chapter 5.2.5 --- Industrials Industry --- p.81 / Chapter 5.2.6 --- Hotels Industry --- p.82 / Chapter VI. --- CONCLUDING REMARKS --- p.85 / BIBLIOGRAPHY --- p.87

This thesis presents three empirical chapters investigating the informativeness of aggregate insider trading activities in the UK’s stock and option markets. Chapter one examines the relationship between aggregate insider trading and stock market volatility. The results suggest a positive relationship between aggregate insider trading and stock market volatility, confirming the hypothesis that aggregate insider trading increases the rate of flow of information into the stock market which in turn increases stock market volatility. Given that insiders also trade for non-informational reasons, we distinguish between informative and noisy insider trades and examine whether they affect stock market volatility differently. We find that only aggregate insider buy trades and medium sized insider trades affect stock market volatility positively. Chapter two re-examines whether aggregate insider trading can help predict future UK stock market returns. The results suggest that there is information in aggregate insider trading that can help predict future stock market returns. This is due to aggregate insiders’ ability to time the market based on their possession of superior information about unexpected economy-wide changes. We also find that a positive shock in aggregate insider trading causes an increase in future stock market returns two months after the shock. We test whether there is information in medium insider trades that can help predict future stock market returns. The results suggest that medium insider trades, specifically medium insider buy trades can help predict future stock market returns. Lastly, chapter three explores the relationship between aggregate exercise of executive stock options (ESO) and stock market volatility. Insiders in possession of private information may use their informational advantage to trade in the option markets via their exercise of ESOs which may affect stock market volatility. We find that aggregate exercise of ESOs affect stock market volatility positively. This is due to an increase in the rate of flow of information released via private information motivated exercises which cause prices to move as they adjust to the new information thereby increasing volatility. When executives have private information about future stock performance, they are motivated to exercise and sell stocks post exercise to avoid losses. They are also motivated to exercise and sell only a proportion of their stocks, specifically more than 50% of the acquired stocks and they exercise near the money ESOs. We find that for all these private information motivated reasons to exercise ESOs, stock market volatility is positively affected.

Wan Yanyan. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2006. / Includes bibliographical references (leaves 53-56). / Abstracts in English and Chinese. / Chapter I. --- Introduction --- p.1 / Chapter II --- Disclosure of Interests (DI) Regimes in Hong Kong --- p.5 / Chapter II.1. --- Development of Disclosure of Interests (DI) Regulations --- p.5 / Chapter II.2. --- Differences in Two Disclosure of Interests (DI) Regimes --- p.8 / Chapter III. --- Literature Review and Hypotheses --- p.11 / Chapter IV. --- Data and Methodology --- p.15 / Chapter IV.1. --- Data --- p.15 / Chapter IV.2. --- Descriptive Statistics --- p.20 / Chapter IV.3. --- Methodology --- p.22 / Chapter V. --- Results --- p.24 / Chapter V.1. --- Market Reaction to Insiders，Transactions --- p.24 / Chapter V.2. --- Information Asymmetry Hypothesis --- p.28 / Chapter V.2.1. --- Company Size Effect --- p.28 / Chapter V.2.2. --- Index Membership Effect --- p.32 / Chapter V.2.3. --- Industry Effect --- p.34 / Chapter V.2.4. --- Tests of Information Asymmetry Hypothesis for Subsamples --- p.41 / Chapter V.3. --- The Effect of Different DI Regulations --- p.42 / Chapter V.3.1. --- Full Sample --- p.43 / Chapter V.3.2. --- Subsamples --- p.48 / Chapter VI. --- Conclusion --- p.49 / Reference --- p.53 / Appendices --- p.57 / Appendix 1 --- p.57 / Appendix 2 --- p.67 / Appendix 3 --- p.70

Tam,Tsz-Wa. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2004. / Includes bibliographical references (leaves 105-109). / Abstracts in English and Chinese. / Abstract --- p.i / Acknowledgement --- p.iv / Table of Contents --- p.v / Chapter Chapter 1 --- Introduction --- p.1 / Chapter 1.1 --- Insider Trading and Corporate Governance --- p.1 / Chapter 1.2 --- Insider Trading and Stock Volatility --- p.3 / Chapter 1.3 --- Objective of the Thesis Research --- p.4 / Chapter Chapter 2 --- Literature Review --- p.6 / Chapter 2.1 --- Review of Theoretical Literature --- p.6 / Chapter 2.2 --- Review of Empirical Literature --- p.18 / Chapter Chapter 3 --- Insider Dealing Regulations in Hong Kong --- p.24 / Chapter Chapter 4 --- Data --- p.27 / Chapter 4.1 --- Data Collection --- p.27 / Chapter 4.2 --- Summary Statistics of Insider Trading Data --- p.30 / Chapter Chapter 5 --- Methodology --- p.31 / Chapter 5.1 --- Hypothesis --- p.31 / Chapter 5.2 --- Event Study --- p.32 / Chapter 5.3 --- Vector Autoregression (VAR) Analysis --- p.41 / Chapter Chapter 6 --- Empirical Results: Event Study --- p.51 / Chapter 6.1 --- General Description of Results --- p.51 / Chapter 6.2 --- Volatility Change Immediately before Insider Trading --- p.53 / Chapter 6.3 --- Volatility Immediately before and after Insider Trading --- p.61 / Chapter 6.4 --- Volatility Change Immediately after Insider Trading --- p.67 / Chapter 6.5 --- Intermediate Term Volatility before and after Insider Trading --- p.72 / Chapter 6.6 --- Chapter Summary and Discussion --- p.79 / Chapter Chapter 7 --- Empirical Results: Vector Autoregression (VAR) Analysis --- p.83 / Chapter 7.1 --- Volatility of Hang Seng Index Return --- p.83 / Chapter 7.2 --- Volatility of Market Value Weighted Index Return --- p.85 / Chapter 7.3 --- Volatility of Equal Weighted Index Return --- p.87 / Chapter 7.4 --- Aggregate Total Volatility --- p.89 / Chapter 7.5 --- Aggregate Abnormal Return Volatility --- p.91 / Chapter 7.6 --- Aggregate Firm Specific Volatility --- p.93 / Chapter 7.7 --- Chapter Summary and Discussion --- p.95 / Chapter Chapter 8 --- Conclusion --- p.97 / Bibliography --- p.105

Zhang, Yujie. / "August 2011." / Thesis (M.Phil.)--Chinese University of Hong Kong, 2011. / Includes bibliographical references (leaves 53-56). / Abstracts in English and Chinese. / Abstract --- p.ii / 摘要 --- p.iii / Acknowledgement --- p.iv / Chapter 1. --- Introduction --- p.1 / Chapter 2. --- Institutional background and research hypotheses --- p.8 / Chapter 2.1 --- Rules and regulations in China --- p.8 / Chapter 2.2 --- Ownership structure and corporate governance in China --- p.11 / Chapter 2.3 --- Research hypothesis --- p.13 / Chapter 3. --- Construction of variables and model specification --- p.17 / Chapter 3.1 --- Stock return synchronicity (SYNCH) --- p.17 / Chapter 3.2 --- Insider trading --- p.18 / Chapter 3.3 --- Control variables --- p.21 / Chapter 3.4 --- Ownership structure and corporate governance indicators --- p.23 / Chapter 4. --- Descriptive statistics --- p.30 / Chapter 4.1 --- Insider trading --- p.31 / Chapter 4.2 --- Synchronicity --- p.34 / Chapter 4.3 --- Summary of all variables --- p.35 / Chapter 5. --- Regression analysis --- p.37 / Chapter 5.1 --- Effect of insider trading on stock price synchronicity --- p.37 / Chapter 5.2 --- Effect of insider trading by different identities on stock price synchronicity --- p.39 / Chapter 5.3 --- Effect of insider trading on stock price synchronicity under various corporate governance --- p.42 / Chapter 6. --- Robustness checks --- p.46 / Chapter 6.1 --- insider trading and industry-level return --- p.46 / Chapter 6.2 --- The effect of insider trading on industry vs. firm-specific earnings information --- p.47 / Chapter 7. --- Conclusions --- p.51 / References: --- p.53 / Appendix: Variable definitions: --- p.80

Insider trading is one of the practices that (directly or indirectly) lead to a host of problems for example inaccurate stock market prices, high inflation, reduced public investor confidence, misrepresentation and non disclosure of material facts relating to securities and financial instruments. Again it reduces efficiency in the affected companies and eventually leads to economic underperformance. The researcher observed that the South African insider trading regulatory framework has some gaps and flaws which need to be adequately addressed to ensure efficient and stable financial markets. Therefore, the aim of this research is to provide a clear roadmap for an effective, efficient, adequate and internationally competitive insider trading regulatory framework in South Africa. In order to achieve the above stated aim, the historical development of the regulation insider trading is critically analyzed. The effectiveness and adequacy of the Insider Trading Act, 135 of 1998 is also discussed. Furthermore, the prohibition of insider trading under Securities Services Act, 36 of 2004 is explored and analyzed to investigate its adequacy. The role of the Financial Services Board, the Courts and the Directorate for Market Abuse is also scrutinized extensively. Moreover, a comparative analysis is undertaken of the regulation of insider trading in other jurisdictions of United States of America, Canada and Australia. This is done to investigate any lessons that can be learnt or adopted from these jurisdictions. The researcher strongly contends that having the best insider trading laws on paper alone will not cure the insider trading problem. What is required are adequate laws that are enforced effectively in South African courts. Therefore an adequate insider trading regulatory framework must be put in place to improve the efficiency of South African financial markets, to maintain a stable economy, combat misrepresentation and non disclosure of material facts in transactions relating to securities. The researcher has attempted to state the law as at 31 August 2007.

Insider trading on the JSE can be linked, directly or indirectly, to the reputation of the South African financial market. The regulation thereof is essential and a non-negotiable requirement for the successful attraction and retention of investment flows. Inadequacies associated with the regulatory framework regulating insider trading, the onus of proof in a criminal trial and the lack of civil remedies associated with insider trading as a form of market abuse, motivates a critical analysis into the regulatory framework on insider trading in South Africa. The aim of this study is therefore to identify international best practice principles to fill the gap in South Africa’s regulatory framework. This gap relates to the practical application and execution of legislative and other instruments in order to combat insider trading as a form of market abuse. A further aim focuses on the simultaneous development of the legislation relating to financial markets in conjunction with developments in the economy. A final aim is to determine whether and how South Africa can improve its current legislative dispensation on insider trading. In order to arrive at the aim of the study the historical development on the regulation of insider trading is discussed. A critical analysis of the relevant insider trading sections in the Securities Services Act 36 of 2004 is compared with the corresponding sections of the Financial Markets Act 19 of 2012. A discussion on the roles, duties and authority of the Financial Services Board, the Directorate of Market Abuse and the Enforcement Committee will assist in analysing these organisations' contribution in regulating insider trading in South Africa. A look into the application of other regulatory instruments including the JSE’s Code of Conduct is required. In order to determine whether and how South Africa can improve its current legislative dispensation on insider trading, a comparative study is conducted with Hong Kong. It is submitted that the South African regulatory framework on insider trading has to be revised in order to align with international best practice principles and to promote transparency of the JSE, promote investor confidence and ensure justice for all. / LLM (Import and Export Law), North-West University, Potchefstroom Campus, 2015

Insider trading on the JSE can be linked, directly or indirectly, to the reputation of the South African financial market. The regulation thereof is essential and a non-negotiable requirement for the successful attraction and retention of investment flows. Inadequacies associated with the regulatory framework regulating insider trading, the onus of proof in a criminal trial and the lack of civil remedies associated with insider trading as a form of market abuse, motivates a critical analysis into the regulatory framework on insider trading in South Africa. The aim of this study is therefore to identify international best practice principles to fill the gap in South Africa’s regulatory framework. This gap relates to the practical application and execution of legislative and other instruments in order to combat insider trading as a form of market abuse. A further aim focuses on the simultaneous development of the legislation relating to financial markets in conjunction with developments in the economy. A final aim is to determine whether and how South Africa can improve its current legislative dispensation on insider trading. In order to arrive at the aim of the study the historical development on the regulation of insider trading is discussed. A critical analysis of the relevant insider trading sections in the Securities Services Act 36 of 2004 is compared with the corresponding sections of the Financial Markets Act 19 of 2012. A discussion on the roles, duties and authority of the Financial Services Board, the Directorate of Market Abuse and the Enforcement Committee will assist in analysing these organisations' contribution in regulating insider trading in South Africa. A look into the application of other regulatory instruments including the JSE’s Code of Conduct is required. In order to determine whether and how South Africa can improve its current legislative dispensation on insider trading, a comparative study is conducted with Hong Kong. It is submitted that the South African regulatory framework on insider trading has to be revised in order to align with international best practice principles and to promote transparency of the JSE, promote investor confidence and ensure justice for all. / LLM (Import and Export Law), North-West University, Potchefstroom Campus, 2015