Do Short Sellers Front-Run Insider Sales?
Name
SSRN-id1140694.pdf
Size
356.16 KB
Format
Adobe PDF
Checksum (MD5)
0f719de3f30301f2e81611eada00ad7e
Author(s)
Khan, Mozaffar
Lu, Hai
Date Issued
June 3, 2008
Publisher
Cambridge, MA; Alfred P. Sloan School of Management, Massachusetts Institute of Technology
Series/Report no.
MIT Sloan School of Management Working Paper;4706-08
Abstract
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.
Subjects
Short Selling
Insider Sales
Front Running
Information Leakage
Persistent DSpace Link
