Download this Paper Open PDF in Browser

Insider Trading Controversies: A Literature Review

Forthcoming, Annual Review of Financial Economics, vol 6, December 2014

Kelley School of Business Research Paper No. 2014-29

34 Pages Posted: 16 Oct 2013 Last revised: 26 Aug 2014

Utpal Bhattacharya

Hong Kong University of Science & Technology (HKUST) - HKUST School of Business and Management

Multiple version iconThere are 2 versions of this paper

Date Written: August 22, 2014

Abstract

Using the artifice of a hypothetical trial, this article presents the cases 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 initial days of the trial focus on the issues raised in the law literature such as fiduciary responsibility, the misappropriation theory and the fairness and integrity of markets; however, the trial soon transfers focus to issues such as Pareto optimality, efficient contracting, market efficiency, and predictability raised in the financial economics literature. Open issues are then brought up. A jury finally hands down its verdict.

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

JEL Classification: G14, G18, G38, K22

Suggested Citation

Bhattacharya , Utpal, Insider Trading Controversies: A Literature Review (August 22, 2014). Forthcoming, Annual Review of Financial Economics, vol 6, December 2014; Kelley School of Business Research Paper No. 2014-29. Available at SSRN: https://ssrn.com/abstract=2340518 or http://dx.doi.org/10.2139/ssrn.2340518

Utpal Bhattacharya (Contact Author)

Hong Kong University of Science & Technology (HKUST) - HKUST School of Business and Management ( email )

Clear Water Bay
Kowloon
Hong Kong

Paper statistics

Downloads
1,156
Rank
13,961
Abstract Views
6,918