Exchange Trading Rules, Surveillance and Insider Trading

36 Pages Posted: 11 Jun 2012

See all articles by Douglas J. Cumming

Douglas J. Cumming

Florida Atlantic University

Feng Zhan

John Carroll University - Boler School of Business

Michael J. Aitken

Macquarie Graduate School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: November 18, 2011

Abstract

We examine the impact of stock exchange trading rules and surveillance on the frequency and severity of suspected insider trading cases in 22 stock exchanges around the world over the period January 2003-June 2011. Using new indices for market manipulation, insider trading, and broker-agency conflict based on the specific provisions in the trading rules of each stock exchange, along with surveillance of such rules, we show that differences in exchange trading rules and surveillance over time and across markets significantly affect the frequency and severity of insider trading. Surveillance reduces the number of cases and profits per case. Exchange trading rules reduce the number of cases but increase the profits per case.

Keywords: Insider trading, Surveillance, Exchange Trading Rules, Law and Finance

JEL Classification: G12, G14, G18, K22

Suggested Citation

Cumming, Douglas J. and Zhan, Feng and Aitken, Michael J., Exchange Trading Rules, Surveillance and Insider Trading (November 18, 2011). Available at SSRN: https://ssrn.com/abstract=2081295 or http://dx.doi.org/10.2139/ssrn.2081295

Douglas J. Cumming

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://booksite.elsevier.com/9780124095373/

Feng Zhan (Contact Author)

John Carroll University - Boler School of Business ( email )

University Heights, OH 44118-4581
United States

Michael J. Aitken

Macquarie Graduate School of Management ( email )

North Ryde
Sydney, New South Wales 2109
Australia

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