Illegal insider trading and corporate governance Online publication date: Thu, 30-Apr-2015
by Ajit Dayanandan; Han Donker; Mike Ivanof
International Journal of Corporate Governance (IJCG), Vol. 5, No. 1/2, 2014
Abstract: This empirical study examines the role of corporate boards, ownership structure, and executive pay on illegal insider trading in the Netherlands. We use a unique dataset received from the prosecutor of financial crime in the Netherlands. The results of our study show that monitoring of large institutional shareholders and other blockholders, as well as board independency and board size reduce illegal insider trading. The study also confirms the entrenchment hypothesis that managerial shareholdings between 5-25% and executive compensation in the form of stock options positively impact illegal insider trading. Our paper validates some of the moral hazard problems associated with stock compensation schemes in corporate episodes in the 1990s and during the financial crisis in 2008, and points to the policy choices in framing new regulations in the corporate and financial landscape.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Corporate Governance (IJCG):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com