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Insider trading footprints: An empirical look at detected cases in Australia

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  • Dean Katselas
  • Sarah Osborne

Abstract

This paper examines illegal insider trading in Australian equity markets, focusing on whether such trades leave observable footprints in prices and returns. We compile a hand‐collected dataset of identified insider‐trading incidents. Using an event‐study design, we find minimal footprints for earnings announcements and a small negative price effect for M&A deals. A detection‐controlled estimation (DCE) model reveals that while 17.79% of M&A announcements likely involve insider trading, regulators detect only 29.59%. Thus, relying solely on detected trades understates insider trading's broader impact. Our results highlight stealthy trading tactics and the need for enhanced surveillance to combat hidden illegal trades.

Suggested Citation

  • Dean Katselas & Sarah Osborne, 2025. "Insider trading footprints: An empirical look at detected cases in Australia," International Review of Finance, International Review of Finance Ltd., vol. 25(2), June.
    • Handle: RePEc:bla:irvfin:v:25:y:2025:i:2:n:e70013
    DOI: 10.1111/irfi.70013
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