Purpose

The authors examine if opportunistic insider trading profits decrease after the enactment of the Dodd-Frank Act (DFA) in 2010. The DFA expands legal prohibitions on insider trading in the USA.

Design/methodology/approach

The authors identify opportunistic insider trades following a method that is outlined in Cohen et al. (2012). The authors examine univariate statistics and perform multivariate regression tests to examine opportunistic trading profits before and after the DFA. Similar multivariate regression tests have been used widely in the literature to examine the profitability of insider trades.

Findings

The authors find that opportunistic insider purchases were highly profitable before the DFA. Profits after opportunistic purchases were significantly lower after the DFA. Opportunistic insider sales were contrarian trades both before and after the DFA. However, share prices kept increasing after insiders sold their shares.

Originality/value

To the best of the authors’ knowledge, the paper is the first study that compares the profitability of opportunistic insider trades, as identified by Cohen et al., before and after the DFA. The study contributes to the literature that finds that insiders change their strategic trading behavior when the potential costs of the illegal trading increase due to regulatory action.

中文翻译：

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2010 年多德-弗兰克法案前后机会主义内幕交易的利润

目的

作者研究了 2010 年多德-弗兰克法案 (DFA) 颁布后投机性内幕交易利润是否减少。DFA 扩大了美国对内幕交易的法律禁令。

设计/方法/方法

作者按照 Cohen等人概述的方法识别机会主义内幕交易。（2012）。作者检查了单变量统计数据并进行了多元回归测试，以检查 DFA 之前和之后的机会交易利润。类似的多元回归测试已在文献中广泛用于检验内幕交易的盈利能力。

发现

作者发现，在 DFA 之前，机会主义的内幕购买是高利润的。在 DFA 之后，机会性购买后的利润显着降低。机会主义的内幕交易在 DFA 之前和之后都是逆势交易。然而，在内部人士出售股票后，股价继续上涨。

原创性/价值

据作者所知，该论文是第一个比较机会主义内幕交易盈利能力的研究，正如 Cohen等人所确定的那样。，在 DFA 之前和之后。该研究有助于文献发现，当非法交易的潜在成本由于监管行动而增加时，内部人会改变他们的战略交易行为。