Insider trading - Patterns and analysis

For a time, illegal insider trading grabbed headlines in the United States as a succession of high-flying offenders were brought to earth by criminal and civil prosecutions. These flamboyant cases aside, the characteristics of "routine" insider trading have never been explored. This study broke into new substantive territory by providing details regarding 452 persons charged by the federal government with profiting or avoiding losses by means of insider trades. Many of the transactions involved friends and relatives of those who had acquired important information likely to affect equity prices before that information became public. The numerical portrait of various aspects of insider trading was used in the article to address theoretical concerns regarding the study of white-collar crime and, in particular, to comment on Gottfredson and Hirschi's [Gottfredson M. R., & Hirschi, T. (1990). A general theory of crime. Stanford: Stanford University Press] general theory of crime. There was a call for inquiries that combined micro forms of analysis with information derived from individuals personally involved in this form of law-breaking. (C) 2002 Elsevier Science Ltd. All rights reserved.