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Stock Trades of SEC Employees

62 Pages Posted: 23 Oct 2017  

Shivaram Rajgopal

Columbia Business School

Roger M. White

Arizona State University (ASU) - School of Accountancy

Date Written: October 18, 2017


We examine the profitability of stock trades executed by SEC employees. Subject to the considerable constraints of the data (no portfolio information, occupational details, or individual identifiers and inability to determine actual profitability of trades), we find that a hedge portfolio mimicking such trades earns a positive abnormal return of about 8.5% per year in U.S. stocks, driven primarily by negative abnormal future returns on sell transactions. The SEC claims that this result stems in part from employees being forced to sell stocks in a firm when they are assigned to secret investigations. We question whether this policy is reasonable.

Keywords: insider trading, government employee stock trades, securities law

JEL Classification: K22, K42, G14, G28

Suggested Citation

Rajgopal, Shivaram and White, Roger M., Stock Trades of SEC Employees (October 18, 2017). Journal of Law and Economics, Forthcoming; Columbia Business School Research Paper No. 17-105. Available at SSRN:

Shivaram Rajgopal (Contact Author)

Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Roger M. White

Arizona State University (ASU) - School of Accountancy ( email )

Tempe, AZ 85287
United States

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