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Corporate Insiders and the Death of the Firm: Evidence on the Incidence of Insider Trading in Corporate Dissolutions
Author(s) -
Eyssell Thomas H.
Publication year - 1991
Publication title -
financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.621
H-Index - 47
eISSN - 1540-6288
pISSN - 0732-8516
DOI - 10.1111/j.1540-6288.1991.tb00394.x
Subject(s) - business , insider , bankruptcy , insider trading , sample (material) , accounting , monetary economics , finance , economics , law , chemistry , chromatography , political science
To date, little attention has been devoted to the relationship between the transactions of corporate insiders in the periods preceding corporate dissolutions and the form of dissolution taken. This study examines the transactions of corporate insiders preceding two forms of dissolution: bankruptcy and voluntary liquidation. The evidence suggests that prior to voluntary liquidations corporate insiders have been heavy net purchasers of their firms' shares. In contrast, heavy selling by corporate insiders was observed for a sample of firms that filed for bankruptcy.