Bidder country characteristics and informed trading in U.S. targets

Jeff Madura and Marek Marciniak

Journal of International Financial Markets, Institutions and Money, 2014, vol. 29, issue C, 256-284

Abstract: Information leakages experienced by U.S. targets in the pre-bid period are especially pronounced when they involve foreign bidders whose countries have weak insider trading sanctions, are perceived to have prevalent insider trading activity, have a low level of local merger activity, and are not classified as common law countries. Among foreign countries, information leakages are less pronounced when the bidder's government has a cooperative agreement with the SEC. Enforcement cooperation agreements signed between the SEC and foreign regulators serve as an effective means of enforcing the stricter U.S. insider trading laws on a more global scale.

Keywords: Illegal insider trading; Cross-border acquisitions; Insider trading regulation; Insider trading sanctions; Informed trading (search for similar items in EconPapers)
JEL-codes: G14 G15 G28 G34 G38 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:29:y:2014:i:c:p:256-284

DOI: 10.1016/j.intfin.2013.12.009

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