On 23 September 2009, TILEC organized a workshop on insider trading at the premises of the Dutch financial markets authority (AFM) in Amsterdam. This activity was part of the on-going cooperation between TILEC and the AFM, which aims at delivering a better understanding of the functioning and regulation of financial markets. TILEC member Peter de Goeij presented a paper (joint with Peter Cziraki and Luc Renneboog) investigating whether there are patterns of abnormal stock performance around insider trades and option exercises on the Dutch market. The authors find that insider share purchases, sales and option exercises are both better-timed and followed by a stronger market response at firms where shareholder rights are not restricted. They argue that this pattern reflects the high value of private benefits of control enjoyed by insiders at firms which effectively curtail shareholder rights. Former TILEC member Jérémie Lefebvre (Louvain-la-Neuve) presented a paper (joint with Hans Degryse and Frank de Jong) analyzing the bid-ask spread and other liquidity measures on the Dutch stock market on dates of legal insider trading. Measures of asymmetric information increase when insiders trade but there is little evidence of changes in quoted spread, although those can help in predicting abnormal returns.
