New Investment Study Findings Have Been Reported by Investigators at Singapore Management University (Legal Risk and Insider Trading): Investment

2024 FEB 07 (NewsRx) -- By a News Reporter-Staff News Editor at NewsRx Policy and Law Daily -- Research findings on Investment are discussed in a new report. According to news reporting out of Singapore, Singapore, by NewsRx editors, research stated, “Do illegal insiders internalize legal risk? We address this question with hand-collected data from 530 SEC (the U.S. Securities and Exchange Commission) investigations.”

Financial support for this research came from European Research Council (ERC).

Our news journalists obtained a quote from the research from Singapore Management University, “Using two plausibly exogenous shocks to expected penalties, we show that insiders trade less aggressively and earlier and concentrate on tips of greater value when facing a higher risk. The results match the predictions of a model where an insider internalizes the impact of trades on prices and the likelihood of prosecution and anticipates penalties in proportion to trade profits.”

According to the news editors, the research concluded: “Our findings lend support to the effectiveness of U.S. regulations’ deterrence and the long-standing hypothesis that insider trading enforcement can hamper price informativeness.”

This research has been peer-reviewed.

For more information on this research see: Legal Risk and Insider Trading. The Journal of Finance, 2023. The Journal of Finance can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA.

Our news journalists report that additional information may be obtained by contacting Emiliano S. Pagnotta, Singapore Management University, Singapore, Singapore.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1111/jofi.13299. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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