Insider trading during the 2008 financial crisis

The literature suggests that insider trading may outperform the stock market by buying or selling stocks of the company in the short run and/or long run. For this research, we construct a daily index consisting of the most liquid and large company for each tested market: New York Stock Exchange (NYS...

Full description

Saved in:
Bibliographic Details
Published in:Applied financial economics 2011-03, Vol.21 (5), p.301-307
Main Authors: Abumustafa, Naser I., Nusair, Salah A.
Format: Article
Language:English
Subjects:
Economic crisis
Financial crisis
Financial research
Financial services
Financial speculation
Indexes
Insider trading
International finance
Kuwait
Profitability
Scandals
Securities markets
Stock exchange
Stock exchanges
Studies
U.S.A
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:The literature suggests that insider trading may outperform the stock market by buying or selling stocks of the company in the short run and/or long run. For this research, we construct a daily index consisting of the most liquid and large company for each tested market: New York Stock Exchange (NYSE) and Kuwait Stock Exchange (KSE) to test for insider trading. Our finding indicates that insider trading at NYSE and KSE outperform the market in the short run only. The results suggest that both types of insider trading, buying or selling, are profitable in the short run. At the same time, our results conclude that all insiders trading are not profitable in the long run. Stocks that were sold or bought by insiders underperform the market in the long run. We also conclude that both types of insider trading activities significantly increased during the last quarter of 2008 and the first 2 months of 2009 in both NYSE and KSE.
ISSN:0960-3107
1466-4305
DOI:10.1080/09603107.2010.530217