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Recent Canadian Experience on the Profitability of Insider Trades

Author

Listed:
  • Lee, Moon H
  • Bishara, Halim

Abstract

Recent Canadian data on large insider transactions showed that abnormal gains accrued to directors and bank directors during a stock market upturn. During a stock market downturn, beneficial owners, senior officers, and bank directors were compensated by more than the risk-adjusted rates of return from sales of stocks of their own companies. Since J. B. Baesel and G. R. Stein's (1979) early study, abnormal gains persisted in spite of the introduction of stiffer penalties on insider training. Copyright 1989 by MIT Press.

Suggested Citation

  • Lee, Moon H & Bishara, Halim, 1989. "Recent Canadian Experience on the Profitability of Insider Trades," The Financial Review, Eastern Finance Association, vol. 24(2), pages 235-249, May.
  • Handle: RePEc:bla:finrev:v:24:y:1989:i:2:p:235-49
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    Cited by:

    1. Cheng, Louis T.W. & Davidson III, Wallace N. & Leung, T.Y., 2011. "Insider trading returns and dividend signals," International Review of Economics & Finance, Elsevier, vol. 20(3), pages 421-429, June.
    2. Madura, Jeff & Marciniak, Marek, 2014. "Bidder country characteristics and informed trading in U.S. targets," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 29(C), pages 256-284.
    3. Michael Firth & T. Y. Leung & Oliver M. Rui, 2009. "Insider Trading in Hong Kong: Tests of Stock Returns and Trading Frequency," Working Papers 042009, Hong Kong Institute for Monetary Research.
    4. Lambe, Brendan J., 2016. "An unreliable canary: Insider trading, the cash flow hypothesis and the financial crisis," International Review of Financial Analysis, Elsevier, vol. 46(C), pages 151-158.
    5. Jabbour, Alain R. & Jalilvand, Abolhassan & Switzer, Jeannette A., 2000. "Pre-bid price run-ups and insider trading activity: Evidence from Canadian acquisitions," International Review of Financial Analysis, Elsevier, vol. 9(1), pages 21-43, February.

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