The regulation of insider dealing in the UK

Some empirical evidence concerning share prices, merger bids and bidders' advising merchant banks

Paul Barnes*

*Corresponding author for this work

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

This paper provides empirical evidence concerning share price performance of both the target and the bidder prior to the public announcement of a merger bid and the inferences which may be made concerning insider dealing, share rigging and the leakage of information associated with advising merchant banks. It is found that almost 75% of the rise in the share price of a target arising from a bid occurs before its announcement. When this is analysed between bidders' advising merchant banks, it is found that this occurs significantly earlier in the case of two major firms - suggesting their association with it. The implications of the empirical study for stock market regulation are discussed.

Original languageEnglish
Pages (from-to)383-391
Number of pages9
JournalApplied Financial Economics
Volume6
Issue number4
Publication statusPublished - Aug 1996

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