Do Insider Trading Laws Work?

Posted: 22 Jun 2005

See all articles by Arturo Bris

Arturo Bris

IMD International; European Corporate Governance Institute (ECGI); Yale University - International Center for Finance

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This paper presents the first comprehensive global study of insider trading laws and their first enforcement. In a sample of 4,541 acquisitions from 52 countries, I find that insider trading enforcement increases both the incidence, and the profitability of insider trading. The expected total insider trading gains increase. Consequently, laws that proscribe insider trading fail to eliminate insider profits. However, harsher laws work better at reducing the incidence of illegal insider trading.

Suggested Citation

Bris, Arturo, Do Insider Trading Laws Work?. European Financial Management, Vol. 11, No. 3, pp. 267-312, June 2005, Available at SSRN:

Arturo Bris (Contact Author)

IMD International ( email )

Ch. de Bellerive 23
P.O. Box 915
CH-1001 Lausanne

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels


Yale University - International Center for Finance ( email )

Box 208200
New Haven, CT 06520
United States

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