Insider Trading Controversies: A Literature Review

Utpal Bhattacharya

Indiana University - Kelley School of Business - Department of Finance

October 15, 2013

Using the artifice of a hypothetical trial, this paper presents the case for and against insider trading. Both sides in the trial produce as evidence the salient points made in more than 100 years of literature on insider trading. The early days of the trial focus on the issues raised in the law literature like fiduciary responsibility, the misappropriation theory and the fairness and integrity of markets, but the trial soon focuses on issues like Pareto-optimality, efficient contracting, market efficiency, and predictability raised in the financial economics literature. Open issues are brought up. A jury finally hands out its verdict.

Number of Pages in PDF File: 34

Keywords: Insider Trading, Securities Law, Enforcement, Efficient Markets, Cost of Capital, Liquidity

JEL Classification: G14, G18, G38, K22

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Date posted: October 16, 2013  

Suggested Citation

Bhattacharya , Utpal, Insider Trading Controversies: A Literature Review (October 15, 2013). Available at SSRN: http://ssrn.com/abstract=2340518 or http://dx.doi.org/10.2139/ssrn.2340518

Contact Information

Utpal Bhattacharya (Contact Author)
Indiana University - Kelley School of Business - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States
812-855-3413 (Phone)
812-855-5875 (Fax)
HOME PAGE: http://www.kelley.iu.edu/ubhattac/

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