Insiders and the Law: The Impact of Regulatory Change on Insider Trading

Gilbert, Aaron; Tourani-Rad, Alireza and Wisniewski, Tomasz Piotr (2007). Insiders and the Law: The Impact of Regulatory Change on Insider Trading. Management International Review, 47(5) pp. 745–765.

DOI: https://doi.org/10.1007/s11575-007-0043-z

Abstract

Abstract and Key Results

- Despite the importance of insider trading laws in promoting a strong financial market, the impact of regulations in minimizing the detrimental effects of insider trading is unsettled.

- We add to the literature by examining the impact of the introduction of the Securities Market Amendment Act 2002 in New Zealand on several aspects of the market, namely bid-ask spreads, liquidity, price volatility and the cost of capital.

- We find strong evidence of predicted reductions in the cost of capital, bid-ask spreads and volatility accompanied by increases in liquidity. We conclude that the change in regulations has had a positive impact on the market.

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About

• Item ORO ID
• 55395
• Item Type
• Journal Item
• ISSN
• 1861-8901
• Keywords
• Insider Trade; Regulatory Change; New Zealand
• Academic Unit or School
• Faculty of Business and Law (FBL) > Business > Department for Accounting and Finance
  Faculty of Business and Law (FBL) > Business
  Faculty of Business and Law (FBL)
• Copyright Holders
• © 2007 Gabler Verlag
• Depositing User
• Tomasz Wisniewski