Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Sunday, August 5, 2012

Fried on Corporate Insider Trading

Insider Trading via the Corporation, by Jesse M. Fried, Harvard Law School, was recently posted on SSRN.  Here is the abstract:

When a U.S. firm trades its own shares in the open market, it is subject to much less stringent trade-disclosure rules than an insider of the firm trading in those shares. Insiders owning equity in their firm thus frequently engage in indirect insider trading: having the firm buy and sell its own stock at favorable prices. Such indirect insider trading imposes substantial costs on public investors in two ways: by systematically diverting value to insiders and by causing insiders to take steps that destroy economic value. To reduce these costs, I put forward a simple proposal: subject firms to the same trade-disclosure rules imposed on their insiders.

Law Review Articles | Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference Fried on Corporate Insider Trading:


Post a comment