Abstract

http://ssrn.com/abstract=2278635
 


 



Impact of the Galleon Case On Informed Trading Before Merger Announcements


Inga Chira


Oregon State University

Jeff Madura


Florida Atlantic University - College of Business

December 5, 2012

Journal of Financial Research, Forthcoming

Abstract:     
On October 16, 2009, the U.S. government charged Galleon hedge fund founder Raj Rajaratnam and five others with insider trading, in what was described by a key prosecutor overseeing the case as a "wake-up call to Wall Street and to every hedge fund manager." We find that the mean abnormal stock price runup of targets (a measure of informed trading) during the 26 months since the inception of the Galleon case declined from 5.12% to 2.84%. The early evidence strongly suggests that the Galleon case has sent a clear signal to the traders, and that the traders are listening.

Number of Pages in PDF File: 41

Keywords: Insider Trading, Galleon, Mergers

JEL Classification: G34

Accepted Paper Series


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Date posted: June 14, 2013  

Suggested Citation

Chira, Inga and Madura, Jeff, Impact of the Galleon Case On Informed Trading Before Merger Announcements (December 5, 2012). Journal of Financial Research, Forthcoming. Available at SSRN: http://ssrn.com/abstract=2278635

Contact Information

Inga Chira (Contact Author)
Oregon State University ( email )
College of Business
1500 SW Jefferson Way
Corvallis, OR 97331
United States
Jeff Madura
Florida Atlantic University - College of Business ( email )
University Tower
220 SE 2 Avenue
Fort Lauderdale, FL 33301
United States
(954)762-5632 (Phone)
(954)762-5245 (Fax)
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