This study examines the capital-market effects of tipper-tippee insider trading laws. To do so, I exploit the unexpected decision issued by the Court of Appeals for the Second Circuit in U.S. v. Newman 773 F.3d 438, which reduced legal jeopardy for Second Circuit-based market participants prior to being overturned. Consistent with Newman constraining insider trading enforcement, I find strong evidence of plausible insider trading in the Second Circuit following the ruling. I also document a substantial reduction in general trading activity in Second Circuit stocks, as well as an increase in daily quoted spreads and the price impact of trading. These findings are consistent with unchecked insider trading increasing transaction costs and crowding-out investors. In total, my results show that tipper-tippee insider trading restrictions play an important role in bolstering market integrity, and that market participants can to some degree counteract insider trading when public regulation is constrained.

中文翻译：

---

内幕交易法对资本市场的影响：来自纽曼裁决的证据

本研究探讨了内幕交易法对资本市场的影响。为此，我利用了美国第二巡回上诉法院在美国诉纽曼 773 F.3d 438 案中做出的出乎意料的裁决，该裁决在被推翻之前减少了第二巡回法院市场参与者的法律风险。与纽曼限制内幕交易执法的情况一致，我在裁决后发现第二巡回法院存在合理内幕交易的有力证据。我还记录了第二巡回法院股票的一般交易活动大幅减少，以及每日报价价差和交易对价格影响的增加。这些发现与不受控制的内幕交易增加交易成本和挤出投资者的情况是一致的。总的来说，我的研究结果表明，内幕交易限制在增强市场诚信方面发挥着重要作用，并且当公共监管受到限制时，市场参与者可以在某种程度上抵制内幕交易。