Insider Trading B-Side: Relevance, Timeliness and Position Influence

Brazilian Review of Business Management, São Paulo, Vol. 17, No. 58, pp. 1341-1356, Oct./Dec. 2015

16 Pages Posted: 23 Dec 2015

See all articles by Luiz Felipe de Araújo Pontes Girão

Luiz Felipe de Araújo Pontes Girão

Federal University of Paraiba (UFPB)

Orleans Silva Martins

Federal University of Paraiba

Edilson Paulo

Federal University of Paraiba

Date Written: December 21, 2015

Abstract

Objective – Our main objective is to analyze the impacto f insider trading on stock investments’ decision.

Design/methodology/approach – We used an online survey, obtaining 271 valid answers. To analyze our data, we used some parametric (t and F Anova), and non-parametric techniques (Mann-Whitney and Kruskal-Wallis).

Findings – We find that insider tradings are relevant to investment decisions, and the timeliness also exert an influence to this kind of decision, especially abnormal trades.

Practical implications – In practical terms, our results suggests that the Brazilian Securities and Exchange Commission (CVM) must update the Brazilian insider trading regulation to achieve the objective to protect investors. In the investors point of view, this possible update could improve investors’ ability to control insiders and follow his activities as well as to mimic his trades.

Originality/value – The originality of our paper is an analysis of relevance, timeliness and influence of position in a firm as “determinants” of investment decisions. We use these three specific characteristics to criticize the Brazilian insider trading regulation.

Keywords: Capital Markets, Efficient Market Hyphotesis, Information asymmetry

JEL Classification: c91, d40, G12, G14, G39, K22, K42, N26, N46

Suggested Citation

Pontes Girão, Luiz Felipe de Araújo and Martins, Orleans Silva and Paulo, Edilson, Insider Trading B-Side: Relevance, Timeliness and Position Influence (December 21, 2015). Brazilian Review of Business Management, São Paulo, Vol. 17, No. 58, pp. 1341-1356, Oct./Dec. 2015. Available at SSRN: https://ssrn.com/abstract=2707634

Luiz Felipe de Araújo Pontes Girão (Contact Author)

Federal University of Paraiba (UFPB) ( email )

Cidade Universitária
s/n - Castelo Branco III
João Pessoa, Paraiba 58297-000
Brazil

Orleans Silva Martins

Federal University of Paraiba ( email )

Department of Finance and Accounting
João Pessoa, Paraíba
Brazil

HOME PAGE: http://lattes.cnpq.br/5012236039984008

Edilson Paulo

Federal University of Paraiba ( email )

João Pessoa, Paraiba 58038-382
Brazil

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