Does timely reporting of insider trading actually increase insiders’ profits?

More timely reporting has long been considered a way of preventing insider trading, but research finds this may actually help insiders make more money. Studying the impact of the 2002 Sarbanes-Oxley Act, which sped up these reporting times, Professor Xu Jiang found evidence that insiders' profits increased due to better coordination of such trades. By seeing each other's moves sooner, insiders can collude and more profitably benefit from trading on their information.

In this talk, Professor Jiang will examine why more timely reporting may backfire, potentially driving up insiders' profits at the expense of regular investors who don't have this private information.