The authors examine whether executives below the top profit from employer stock trades that avoid public disclosure. Norwegian records from 1997 through 2014 show one month abnormal returns of 68 to 101 basis points, while unrelated stock purchases lose 94 to 116 basis points.
Flying below the radar: Insider trading by executives below the top
Hans Hvide, Kasper Meisner Nielsen
Research
45 Pages
Key Takeaways
Employer stock advantage: Employer stock purchases generated 68 to 101 basis points of abnormal return after one month and roughly 250 basis points after six months.
Outside stock losses: Purchases of unrelated stocks lost 94 to 116 basis points after one month, weakening the case that executives simply possess superior investing ability.
Complete trading history: The dataset covers every Oslo Stock Exchange trade from 1997 through 2014, connecting transactions with each investor's employer and executive position.
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