Management International Review

, Volume 47, Issue 5, pp 745–766

Insiders and the law: The impact of regulatory change on insider trading

  • Aaron Gilbert
  • Alireza Tourani-Rad
  • Tomasz Piotr Wisniewski

DOI: 10.1007/s11575-007-0043-z

Cite this article as:
Gilbert, A., Tourani-Rad, A. & Wisniewski, T.P. MANAGE. INT. REV. (2007) 47: 745. doi:10.1007/s11575-007-0043-z


Abstract and Key Results

  • Despite the importance of insider trading laws in promoting a strong financial market, the impact of regulations in minimizing the detrimental effects of insider trading is unsettled.

  • We add to the literature by examining the impact of the introduction of the Securities Market Amendment Act 2002 in New Zealand on several aspects of the market, namely bid-ask spreads, liquidity, price volatility and the cost of capital.

  • We find strong evidence of predicted reductions in the cost of capital, bid-ask spreads and volatility accompanied by increases in liquidity. We conclude that the change in regulations has had a positive impact on the market.

Key Words

Insider TradeRegulatory ChangeNew Zealand

Copyright information

© Gabler Verlag 2007

Authors and Affiliations

  • Aaron Gilbert
    • 1
  • Alireza Tourani-Rad
    • 1
  • Tomasz Piotr Wisniewski
    • 2
  1. 1.Department of Finance, Faculty of BusinessAuckland University of TechnologyAucklandNew Zealand
  2. 2.School of ManagementUniversity of LeicesterLeicesterUK