Political Connections and Insider Trading

92 Pages Posted: 7 Jun 2019

See all articles by Thuong Harvison

Thuong Harvison

University of Arizona, Eller College of Management, Department of Finance

Date Written: May 13, 2019

Abstract

Politically connected insiders, especially senior officers who hold a director position, are more likely to make informed trades than non-politically connected insiders. This effect, however, is limited to insider sales, consistent with insider sales facing higher legal risk. Politically connected insiders are also more likely to execute trades that would normally be more likely to trigger an SEC insider trading investigation: trading closer to the earnings announcements, trading during periods that overlap with traditional blackout periods, and missing SEC timely reporting requirements.

Keywords: insider trading; political connections; political contributions

JEL Classification: G14, G18, G28, G38, K22

Suggested Citation

Harvison, Thuong, Political Connections and Insider Trading (May 13, 2019). Available at SSRN: https://ssrn.com/abstract=3387495 or http://dx.doi.org/10.2139/ssrn.3387495

Thuong Harvison (Contact Author)

University of Arizona, Eller College of Management, Department of Finance ( email )

McClelland Hall
P.O. Box 210108
Tuscon, AZ 85721
United States

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