Insider Trading, Informed Trading, and Market Making: Liquidity of Securities Markets in the Zero-Sum Game

William & Mary Business Law Review, Vol. 3, No. 1, pp. 1-57, 2012

57 Pages Posted: 7 Mar 2011 Last revised: 23 Mar 2012

Date Written: February 1, 2012

Abstract

This Article reexamines the nexus of relationships among informed transactions, information asymmetry, and liquidity of securities markets in the context of public policy debates about insider trading and its regulation. The Article analyzes this nexus, with the emphasis on recent empirical studies and developments in the securities industry, from a variety of perspectives and considers the validity of the alleged link between insider trading — as opposed to other forms of informed trading — and market liquidity as a justification for the existence of regulation.

Keywords: Insider Trading, Informed Trading, Market Makers, Market Liquidity, Regulation

JEL Classification: D82, G28, K22

Suggested Citation

Dolgopolov, Stanislav, Insider Trading, Informed Trading, and Market Making: Liquidity of Securities Markets in the Zero-Sum Game (February 1, 2012). William & Mary Business Law Review, Vol. 3, No. 1, pp. 1-57, 2012, Available at SSRN: https://ssrn.com/abstract=1779189

Stanislav Dolgopolov (Contact Author)

Decimus Capital Markets, LLC ( email )

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