Do illegal insiders internalize legal risk? We address this question with hand-collected data from 530 SEC (the U.S. Securities and Exchange Commission) investigations. Using two plausibly exogenous shocks to expected penalties, we show that insiders trade less aggressively and earlier and concentrate on tips of greater value when facing a higher risk. The results match the predictions of a model where an insider internalizes the impact of trades on prices and the likelihood of prosecution and anticipates penalties in proportion to trade profits. Our findings lend support to the effectiveness of U.S. regulations' deterrence and the long-standing hypothesis that insider trading enforcement can hamper price informativeness.

中文翻译：

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法律风险和内幕交易

非法内部人员是否将法律风险内在化？我们通过 530 SEC（美国证券交易委员会）调查中手工收集的数据来回答这个问题。通过对预期处罚的两种看似合理的外生冲击，我们发现，内部人士在面临较高风险时，交易的积极性较低且较早，并专注于具有更大价值的提示。结果与模型的预测相符，在该模型中，内部人士将交易对价格的影响和起诉的可能性内化，并预测与交易利润成比例的处罚。我们的研究结果支持了美国监管威慑的有效性以及内幕交易执法可能阻碍价格信息传递的长期假设。