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Insider Trading in Connected Firms during Trading Bans

My latest study with Luc Renneboog and Yang Zhao looks at insider trades by directors who sit on multiple boards. When these directors face a trading ban in one of their firms due to an impending earnings announcement, we find they often trade in one of their other firms, using their private information, and they make a profit by doing so.

These trades aren't illegal, but are they ethical?

You can hear more about our findings in this podcast. An executive summary is available from the Harvard Law School Forum on Corporate Governance.

The study itself can be downloaded from the website of the European Corporate Governance Institute (ECGI).

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