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Behind the Scenes: Are Swedish Laws efficient in stopping insider trading?
2011 (English)Independent thesis Advanced level (degree of Master (One Year)), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

In the aftermath of the verdict of acquittal in “Sweden’s largest insider trading case” once again a debate concerning illegal insider trading has arisen and a lot of criticism is directed towards the laws. The purpose of this master´s thesis is to investigate the occurrence of insider trading and whether or not Swedish legislation has decreased the presence of insider trading on the Stockholm Stock Exchange. For this purpose the legal aspects and relevant arguments are presented and discussed. An event study is performed in order to see if profit warnings show evidence of insider trading on the Swedish stock exchange.

The event study show statistically significant evidence of illegal insider trading in 21 out of 44 cases on the Stockholm stock exchange. There is no significant difference in insider trading between profit warnings and reversed profit warnings. The regression show evidence of that the law has had a small negative impact on insider trading in the sample which is surprising and that insider trading is industry correlated. The high frequency of insider trading shows evidence of that the laws are inefficient in stopping insider trading.

Since it is clear that the law is seriously flawed in stopping insider trading and that insider trading actually may positively affect the market and its participants, it is argued that it is very questionable if the legislation is necessary and if insider trading should be prohibited at all.

Place, publisher, year, edition, pages
2011. , p. 26
Keywords [en]
Insider trading, Profit warnings, Event study, Market efficiency
National Category
Economics
Identifiers
URN: urn:nbn:se:hj:diva-14428OAI: oai:DiVA.org:hj-14428DiVA, id: diva2:391325
Uppsok
Social and Behavioural Science, Law
Supervisors
Examiners
Available from: 2011-02-02 Created: 2011-01-24 Last updated: 2011-02-02Bibliographically approved

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf