Abstract

http://ssrn.com/abstract=1013482
 
 

References (59)



 
 

Citations (1)



 


 



Private Regulation of Insider Trading in the Shadow of Lax Public Enforcement: Evidence from Canadian Firms


Anita I. Anand


University of Toronto - Faculty of Law

Laura Nyantung Beny


University of Michigan Law School

January 14, 2008

Harvard Business Law Review, Vol. 3, No. 2, 2013
U of Michigan Law & Economics, Olin Working Paper No. 07-019
2nd Annual Conference on Empirical Legal Studies Paper

Abstract:     
Like U.S. firms, many Canadian firms voluntarily restrict trading by corporate insiders beyond the requirements of insider trading laws (i.e., super-compliance). Thus, we aim to understand the determinants of firms' private insider trading policies (ITPs), which are quasi-contractual devices. Based on the assumption that firms that face greater costs from insider trading (or greater benefits from restricting insider trading) ought to be more inclined than other firms to adopt more stringent ITPs, we develop several testable hypotheses. We test our hypotheses using data from a sample of firms included in the Toronto Stock Exchange/Standard and Poor's (TSX/S&P) Index. Our empirical results suggest that Canadian firms do not randomly restrict insider trading, but rather do so predictably and with a predictable level of intensity, suggesting that some firms wish to control insider trading to enhance corporate performance. Our most robust finding is that firms with a greater prevalence of controlling shareholders are more likely to have adopted a super-compliant ITP than firms with fewer such shareholders, implying that influential shareholders may oppose insider trading and challenging the claim that private restrictions of insider trading would not arise in the absence of insider trading laws.

Number of Pages in PDF File: 44

Keywords: insider trading, private regulation, public enforcement, securities laws, optional corporate rules, extra-territorial effect of U.S. laws

JEL Classification: K00, K22, G38, M14, N20, P50

Accepted Paper Series





Download This Paper

Date posted: July 5, 2007 ; Last revised: July 17, 2013

Suggested Citation

Anand, Anita I. and Beny, Laura Nyantung, Private Regulation of Insider Trading in the Shadow of Lax Public Enforcement: Evidence from Canadian Firms (January 14, 2008). U of Michigan Law & Economics, Olin Working Paper No. 07-019; Harvard Business Law Review, Vol. 3, No. 2, 2013; U of Michigan Law & Economics, Olin Working Paper No. 07-019; 2nd Annual Conference on Empirical Legal Studies Paper. Available at SSRN: http://ssrn.com/abstract=1013482 or http://dx.doi.org/10.2139/ssrn.1013482

Contact Information

Anita I. Anand
University of Toronto - Faculty of Law ( email )
78 and 84 Queen's Park
Toronto, Ontario M5S 2C5
Canada
Laura Nyantung Beny (Contact Author)
University of Michigan Law School ( email )
625 South State Street
Ann Arbor, MI 48109-1215
United States
Feedback to SSRN


Paper statistics
Abstract Views: 2,058
Downloads: 304
Download Rank: 58,443
References:  59
Citations:  1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo3 in 0.360 seconds