Abstract
This paper addresses the impact of the unethical business conduct of a few individuals that shook the financial market in 1986. Specifically, in the study undertaken for this paper, the wealth status of the shareholders of securities firms was examined in relation to the public disclosure of the insider-trading scandals involving Dennis Levine, Ivan Boesky, and their confederates. It was hypothesized that the expected market-adjusted stock returns for the securities firms would be negative as a result of the scandals. The findings of the study supported the hypothesis.
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Khalil M. Torabzadeh is Associate Professor of Finance at Radford University in Virginia. He earned his DBA in Finance from Mississippi State University in 1984. He began his teaching career at Appalachian State University, Boone, North Carolina, in 1982, and joined the faculty of Radford University in 1985. He has had articles published in the Journal of Financial Research and the Journal of Applied Business Research.
Dan Davidson is Professor of Business Law at Radford University in Virginia. He has five teaching awards, including the ‘Razorback Outstanding Business Faculty’ Award from the University of Arkansas. He is the author of four textbooks published by PWS Kent Publishing Co., and his articles have been published in the Journal of Business Ethics, the Business Law Review, the Education Forum, and the Journal of Insurance Issues and Practices, among others.
Hamid Assar is an Assistant Professor of Finance at Radford University in Virginia. His educational background includes a PhD in Financial Economics (expected in 1989) from Southern Illinois University, an MBA from Central State University in Oklahoma, and a Masters degree in Economics from the University of West Virginia. His research interests are in the areas of mergers and acquisitions, financial markets, and international finance.
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Torabzadeh, K.M., Davidson, D. & Assar, H. The effect of the recent insider-trading scandal on stock prices of securities firms. J Bus Ethics 8, 299–303 (1989). https://doi.org/10.1007/BF00383344
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DOI: https://doi.org/10.1007/BF00383344