Do Short Sellers Front-Run Insider Sales?
We find evidence of significant increases in short sales immediately prior to large insider sales, consistent with information leakage and front-running. We examine a number of alternative explanations that the increase in short sales is driven by public information about the firm or about the im...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | en_US |
| Published: |
Cambridge, MA; Alfred P. Sloan School of Management, Massachusetts Institute of Technology
2011
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| Subjects: | |
| Online Access: | http://hdl.handle.net/1721.1/65427 |
| Summary: | We find evidence of significant increases in short sales immediately prior to large insider
sales, consistent with information leakage and front-running. We examine a number of
alternative explanations that the increase in short sales is driven by public information
about the firm or about the impending insider sale, but the evidence is inconsistent with
these explanations. The result has implications for the enforcement of insider
information regulations, and for timely disclosure of short sales information by stock
exchanges. |
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