Insider Trading Controversies: A Literature Review

Utpal Bhattacharya ()

Annual Review of Financial Economics, 2014, vol. 6, issue 1, 385-403

Abstract: Using the artifice of a hypothetical trial, this article presents the cases for and against insider trading. Both sides in the trial produce as evidence the salient points made in more than 100 years of literature on insider trading. The initial days of the trial focus on the issues raised in the law literature such as fiduciary responsibility, the misappropriation theory, and the fairness and integrity of markets; however, the trial soon transfers focus to issues such as Pareto optimality, efficient contracting, market efficiency, and predictability raised in the financial economics literature. Open issues are then brought up. A jury finally hands down its verdict.

Keywords: insider trading; securities law; enforcement; efficient markets; cost of capital; liquidity (search for similar items in EconPapers)
JEL-codes: G14 G18 G38 K22 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (35)

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