Download or read book Political Connections and Insider Trading written by Thomas Bourveau and published by . This book was released on 2016 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates whether political connections affect individuals' propensity to engage in illegal activities in financial markets. We use the French 2007 presidential election as a plausibly exogenous change in the value of political connections in a difference-in-differences research design. Specifically, we examine the behavior of directors of publicly listed companies that are connected to the future President through campaign donations or direct friendships, relative to that of other non-connected directors before and after the election. We find that after the election, insider purchases by connected directors experience larger abnormal returns and that connected directors are more likely not to comply with trading disclosure requirements and to trade closer to major corporate events.

Download or read book Political Connections written by Ozlem Akin and published by . This book was released on 2018 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: To test for private information leakages from government to corporate executives, we exploitthe 2008-2010 bank bailouts after Lehman's failure using insider trading and political connections.In politically-connected banks, insider buying during the pre-TARP period is associatedwith increases in abnormal returns around bank-specific TARP announcement; for unconnectedbanks, trading and returns are uncorrelated. Results hold across insiders within the same bank andare stronger for finance-related government connections. Through a FOIA request we obtained thepreviously undisclosed TARP funds requested; the ratio of received to requested funds correlatesboth with abnormal returns and insider buying behavior in connected banks.

Download or read book Political Connections and the Informativeness of Insider Trades written by Alan D. Jagolinzer and published by . This book was released on 2017 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the relation between political connections and informed trading by corporate insiders in the context of the Financial Crisis. The unprecedented magnitude of government intervention, the substantial impact of this intervention on firm value, and the political nature of the intervention provide a powerful setting to examine the relation between political connections and informed trading. Consistent with political connections providing corporate insiders with an information advantage, we find strong evidence of a relation between political connections and the informativeness of their trades. Consistent with this relation stemming from private information related to government intervention, we find the relation is strongest during the period in which TARP funds were dispersed, and strongest among politically connected insiders at banks that received TARP funds. Examining insider trades around the announcements of TARP infusions, we find evidence of significant trading thirty days in advance of the announcement, and that these trades predict the market reaction to the announcement. Notably, we find these relations are present only for the trades of politically connected insiders. Overall, our results suggest that politically connected insiders had an information advantage during the Crisis and traded to exploit this advantage.

Download or read book Political Connections and White Collar Crime written by Thomas Bourveau and published by . This book was released on 2017 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates whether political connections affect individuals' propensity to engage in illegal activities in financial markets. We use the 2007 French presidential election as marker of change in the value of political connections, in a difference-in-differences research design. We examine the behavior of directors of publicly listed companies who are connected to the future president through campaign donations or direct friendships, relative to that of other non-connected directors, before and after the election. We uncover indirect evidence that connected directors do more illegal insider trading after the election. More precisely, we find that purchases by connected directors trigger larger abnormal returns, and that connected directors are more likely not to comply with trading disclosure requirements and to trade closer to major corporate events.

Download or read book Throw Them All Out written by Peter Schweizer and published by Houghton Mifflin Harcourt. This book was released on 2011 with total page 245 pages. Available in PDF, EPUB and Kindle. Book excerpt: Schweizer, a research fellow at the Hoover Institution at Stanford University, discusses the state of government and the depths of its political corruption.

Download or read book Essays on Insider Trading written by Valeriya Vitalyevna Posylnaya and published by . This book was released on 2018 with total page 142 pages. Available in PDF, EPUB and Kindle. Book excerpt: The first essay explores relations between political affiliations and illegal insider trading. Assessing illegal insider trading is challenging due to the nature of the activity. Researchers observe and evaluate only the detected portion of illegal trading, not all illegal transactions. This presents a problem when using traditional empirical techniques to investigate such activity. In our analysis we employ a bivariate probit model that takes into account the partial observability nature of insider trading and provides estimates for the determinants of both the commission and the detection of illegal insider trading. Among our findings, most notable is the influence of the SEC's political structure on insider trading detection. We show that the political party affiliation within the SEC, past indictments by the SEC, and SEC budget play a crucial role in determining current prosecution. Past SEC indictments significantly decrease the likelihood to engage in illegal insider trading as well. Essay two investigates insider trading returns by corporate insiders in light of their firms' lobbying activities. Lobbying is a channel firms often use to influence regulatory change. Firms also use lobbying to obtain information on upcoming legislative and regulatory changes that are significant to the firms' future. Establishing and maintaining these political connections provides informational advantage not only to the firms engaged in lobbying but also to the insiders of these firms who receive an opportunity to base their trading decision on this potentially valuable information. Using data on firm lobbying activities, we provide evidence of an informational advantage acquired by corporate insiders of firms that develop these connections with policymakers. We find that insiders of lobbying firms gain additional return of 138 (156) basis points on their buys (sells) trades relative to transactions placed by insiders of firms that are not engaged in lobbying activities. We also document that the role of establishing and fostering lobbying contacts and the amounts spent on lobbying differ with type of insider transactions and length of investment horizons. The focus of the third essay is the impact of actual trading on material non-public information on firms' securities. Finance and law scholars present theoretical arguments both in favor of and against trading on material non-public information. However, investigating empirically the actual impact of insider trading on the insider's firm poses significant challenges due to the lack of precision in identifying from publically available data trades that are based on private information. In this study, we utilize Securities Exchange Commission (SEC) indictments of illegal insider trading to examine the impact of illegal insider trading on the firm. We provide evidence suggesting that illegal insider trading increases stock market liquidity for the involved firms. Our results imply that bid-ask spread following transactions based on private information is narrower for long-run windows. However, we also find results implying that informed trading is associated with reduced liquidity, when estimated with Amihud Illiquidity proxy, reflecting price impact of trades based on private information.

Download or read book Insider Trading written by Jonathan R. Macey and published by American Enterprise Institute. This book was released on 1991 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt: The book presents different perspectives that explain the prohibition of insider trading and the way it affects various aspects of life on the stock market.

Download or read book Enforcement Manual written by United States. Securities and Exchange Commission. Division of Enforcement and published by . This book was released on 2008 with total page 144 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Political Insider Trading written by Michael R. Siebecker and published by . This book was released on 2017 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: Should the same legal principles that prohibit insider trading require corporations to disclose their political spending as well? The question seems particularly important in light of the increasing dominance of corporations in the political realm, the lack of transparency regarding corporate political activity, and the inherently suspicious motives of corporate executives who use corporate treasuries to advance their personal political preferences. This Article examines how the fiduciary principles of trust that underpin prohibitions on insider trading could inform and enhance the content of the general fiduciary duties that corporate officers and directors owe to their shareholders. Although insider trading prohibitions rest on the statutory foundation of federal securities law, the U.S. Supreme Court extrapolates the content of insider trading doctrine from the overarching common law fiduciary duties that govern the daily decisions of corporate managers. In the insider trading context, however, the Supreme Court has articulated a special disclosure obligation based on those fiduciary duties that is not currently recognized in other areas of corporate law. In particular, the Supreme Court requires that to avoid liability for illicit insider trading, a corporate insider who possesses material nonpublic information must either disclose that information to shareholders prior to trading or abstain from trading altogether.A fiduciary breach due to secret use of corporate assets for personal gain marks the essential concern in both the insider trading realm and in the context of corporate political spending. Therefore, adopting a similar common law fiduciary rule that corporate managers must disclose the amount and target of political expenditures or refrain from engaging in political activity does not seem like much of an intellectual leap. Not only would such a common law disclosure duty fit neatly within existing corporate governance principles, but the compelled transparency would not offend corporations' First Amendment rights. In the end, prohibiting political insider trading through a “disclose or abstain” rule for corporate political spending would promote greater efficiency in the capital markets, ensure corporate accountability and political legitimacy, and sustain the growing market for corporate social responsibility.

Download or read book Throw Them All Out written by Peter Schweizer and published by HarperCollins. This book was released on 2011-11-15 with total page 245 pages. Available in PDF, EPUB and Kindle. Book excerpt: THE BOOK WASHINGTON DOES NOT WANT YOU TO READ How is it that politicians often enter office with relatively modest assets, but then, as investors, regularly beat the stock market and sometimes beat the most rapacious hedge funds? How did some members of Congress know to dump their stock holdings just in time to escape the effects of the 2008 financial meltdown? And how is it that billionaires and hedge fund managers often make well-timed investment decisions that anticipate events in Washington? In this powerfully argued book, Peter Schweizer blows the lid off Washington’s epidemic of “honest graft.” He exposes a secret world where members of Congress insert earmarks into bills to improve their own real-estate holdings, and campaign contributors receive billions in federal grants. Nobody goes to jail. Throw Them All Out casts light into the darkest corners of the political system — and offers ways to clean house. "Throw Them All Out is filled with stories of petty theft and so-called 'honest graft' . . . Unsparingly bipartisan in [its] criticism of Washington . . . Mr. Schweizer has performed a valuable service to his country." — Washington Times

Download or read book Essays on Insider Trading Innovation and Political Economy written by Jiawei Chen and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: I study how insider trading interacts with the political economy, regulators, and other corporate governance mechanisms. In the first section, I examine the impact of insider trading restriction enforcement on firm innovation. U. S. Securities and Exchange Commission enforcement actions are intended to protect investors and limit expropriation by firm insiders, but enforcement could impact insiders’ incentives to contribute to value enhancing activities. Therefore, I explore how corporate innovation and performance respond to insider trading restrictions imposed by firms and regulators. Using manually collected data on SEC indictments against corporate insiders, I document more innovative activity following external insider trading restrictions. External restrictions are also followed by higher corporate investment, capital access, and operating performance. Similarly, internal blackout restrictions to insider trading are also linked to more patents. SEC and congressional rule changes serve as quasi-natural experiments resulting in shocks in enforcement and indictments for identification and inference. Overall, the results suggest insider trading restrictions and enforcement actions impact subsequent firm activities and managerial decisions by protecting outside investment, resulting in more investment and innovation. In the second section, I explore the relation between political uncertainty and insider trading. With political uncertainty elevated recently, I examine the role of political uncertainty among insiders. By measuring firm-specific political risk measured from conference calls, I observe insiders trade more actively during uncertain periods with trading volume and transaction value increasing alongside political uncertainty. The results are driven by non-routine insider transactions and purchases at firms with CEO duality and fewer insider trading restrictions. Next, I observe similar results when exploiting variation in election timing across states and alternative external measures. Moreover, I find evidence of informed insider trading by observing higher abnormal returns following insider trades amidst political uncertainty. Finally, I find political uncertainty is linked to lower bid-ask spreads and leverage but observe higher outstanding shares with more insider trading when experiencing positive political uncertainty, consistent with insiders informing markets and improving liquidity. Overall, these results suggest insiders purchase more actively and opportunistically amidst political uncertainty, improving market information quality, especially when internal governance is accommodating.

Download or read book Political Power and Corporate Control written by Peter A. Gourevitch and published by Princeton University Press. This book was released on 2010-06-20 with total page 365 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why does corporate governance--front page news with the collapse of Enron, WorldCom, and Parmalat--vary so dramatically around the world? This book explains how politics shapes corporate governance--how managers, shareholders, and workers jockey for advantage in setting the rules by which companies are run, and for whom they are run. It combines a clear theoretical model on this political interaction, with statistical evidence from thirty-nine countries of Europe, Asia, Africa, and North and South America and detailed narratives of country cases. This book differs sharply from most treatments by explaining differences in minority shareholder protections and ownership concentration among countries in terms of the interaction of economic preferences and political institutions. It explores in particular the crucial role of pension plans and financial intermediaries in shaping political preferences for different rules of corporate governance. The countries examined sort into two distinct groups: diffuse shareholding by external investors who pick a board that monitors the managers, and concentrated blockholding by insiders who monitor managers directly. Examining the political coalitions that form among or across management, owners, and workers, the authors find that certain coalitions encourage policies that promote diffuse shareholding, while other coalitions yield blockholding-oriented policies. Political institutions influence the probability of one coalition defeating another.

Download or read book The Enforcement of Law written by Robert McMurdy and published by . This book was released on 1914 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Behind Open market Share Repurchase in China written by Peiyi Li and published by . This book was released on 2019 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using 234 open-market share repurchase announcements in China from June 2005 to March 2018, I investigate whether insiders in the repurchasing firms are able to make a profit for themselves, and whether politically connected firms are able to benefit more from announcing open-market share repurchases. On average, I find that share repurchase announcements generate a 3-day cumulative abnormal return of 2.75%. Insiders are able to make a 3.76% abnormal return by trading within 90 days following the repurchase announcements. By examining insider net purchasing and net selling activities separately, I find that net purchasing activities are more prevalent and tend to generate higher abnormal return than net selling activities. The results in general support the timing ability of insiders to make profits by trading. I also find that the post-announcement insider trading activities are triggered by short-term mispricing subsequent to repurchase announcement. On the other hand, political connection is found to have no impact on abnormal announcement return, instead, undervaluation appears to be the primary driver for firms to announce open-market share repurchase. Sample firms with high book-to-market ratio tend to outperform their matching portfolios in the long run by 2.44%as they are more undervalued. However, this result only remains significant for non-politically connected firms when the full sample is divided according to political connection. It suggests that for undervalued firms, politically connected ones generally perform worse than non-connected repurchasing firms after the announcement, as they are unable to beat their matching portfolios in the long run.

Download or read book Systematic Reviews in the Social Sciences written by Mark Petticrew and published by John Wiley & Sons. This book was released on 2008-04-15 with total page 352 pages. Available in PDF, EPUB and Kindle. Book excerpt: Such diverse thinkers as Lao-Tze, Confucius, and U.S. Defense Secretary Donald Rumsfeld have all pointed out that we need to be able to tell the difference between real and assumed knowledge. The systematic review is a scientific tool that can help with this difficult task. It can help, for example, with appraising, summarising, and communicating the results and implications of otherwise unmanageable quantities of data. This book, written by two highly-respected social scientists, provides an overview of systematic literature review methods: Outlining the rationale and methods of systematic reviews; Giving worked examples from social science and other fields; Applying the practice to all social science disciplines; It requires no previous knowledge, but takes the reader through the process stage by stage; Drawing on examples from such diverse fields as psychology, criminology, education, transport, social welfare, public health, and housing and urban policy, among others. Including detailed sections on assessing the quality of both quantitative, and qualitative research; searching for evidence in the social sciences; meta-analytic and other methods of evidence synthesis; publication bias; heterogeneity; and approaches to dissemination.

Download or read book Political Standards written by Karthik Ramanna and published by University of Chicago Press. This book was released on 2015-11-09 with total page 300 pages. Available in PDF, EPUB and Kindle. Book excerpt: Assembling compelling and unprecedented evidence, "Political Standards: Accounting for Legitimacy" documents how in subtle ways the rules of corporate accounting a critical institution in modern market capitalism have been captured to benefit industrial corporations, financial firms, and audit firms. In what is perhaps the only independent overview of the accounting industry, Karthik Ramanna begins with a history of corporate accounting and an accessible explanation of how it works today, including the essential roles it plays in defining the fundamental notion of profitability, facilitating asset allocation, and ensuring the accountability of corporations and their managers. From the evidence, Ramanna shows how accounting rule-makers selectively co-opt conceptual arguments from academia and elsewhere to advance the views of the special-interest groups. From this, Ramanna moves on to develop more broadly a new type of regulatory challenge that of producing public policy in a thin political market. His argument is that accounting rules cannot be determined without the substantial expertise and experience of groups that by definition also have strong commercial interests in the outcome." Political Standards" concludes with an exploration of possible solutions to the problem in accounting and that of thin political markets in general, charting avenues for scholarship and practice. Certain to be an eye-opening account of a massive industry central to the modern business world, "Political Standards "will be an essential resource in understanding how the rules of the game business are set, whom they inevitably favor, and how they can be changed for the better of society."

Download or read book Circle of Friends written by Charles Gasparino and published by Harper Collins. This book was released on 2013-07-02 with total page 316 pages. Available in PDF, EPUB and Kindle. Book excerpt: The bestselling author of The Sellout tells the explosive story of the government’s crackdown on insider-trading networks—an investigation that has already racked up more than 60 convictions. In Circle of Friends, award-winning journalist Charles Gasparino—one of Wall Street's most knowledgeable observers—follows government investigators and prosecutors as they pursue one of the most aggressive and broad-reaching series of insider-trading cases in the nation's history. A richly textured page-turner of investigative journalism based on extensive reporting, Circle of Friends chronicles the massive federal crackdown that has already put some of the biggest names on Wall Street behind bars, including Raj Rajaratnam, founder of the Galleon Group, and Rajat Gupta, a former CEO of consulting giant McKinsey & Co. Other similarly sized targets are still waiting nervously, including the biggest one of them all—financial impresario Steve Cohen of SAC Capital, the giant hedge fund that has confounded regulators for years by cranking out a steady stream of market-busting returns. Gasparino goes behind the headlines to reveal how the government makes its case, using every tool at its disposal—and at great expense to taxpayers—to supposedly make the investing world safer for average Americans. Gasparino asks why federal officials are so eager to prosecute these cases: What is the real damage to individuals? Do average investors really care? He explores why insider trading is all the rage these days when the U.S. government has failed to bring a single criminal case against the culprits who caused the 2008 financial crisis. Circle of Friends is not a defense of insider trading, but it does offer an account of the politics of Wall Street crime fighting, revealing the behind-the-scenes ambitions that motivate headlines and burnish political careers. A riveting work of narrative nonfiction, as engrossing and explosive as fictional thrillers of the finest magnitude, Circle of Friends is a wakeup call to the investing public.