Exchange Trading Rules, Surveillance, and Suspected Insider Trading
53 Pages Posted: 12 Jun 2015
Date Written: June 11, 2015
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 through June 2011. Using new indices for market manipulation, insider trading, and broker-agency conflict based on the specific provisions of the trading rules of each stock exchange, along with surveillance to detect non-compliance with such rules, we show that more detailed exchange trading rules and surveillance over time and across markets significantly reduce the number of suspected cases, but increase the profits per suspected case.
Keywords: Insider trading, Surveillance, Exchange Trading Rules, Law and Finance
JEL Classification: G12, G14, G18, K22
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