Brendan John Lambe

The Informational Value of Aggregated Measures of Insider Trading in the UK Banking Sector

Previous research remains inconclusive as to whether fluctuations in aggregated insider trading measures can be predictive of wider economic change. This paper contributes toward resolving this contention. Based upon a recent dataset on UK company director’s trades in the banking sector, our study attempts to disentangle the relationship between bank returns, the activities of bank insiders and a variable taken to represent the extent of media coverage of the financial crisis. Initial findings suggest that the relationship is slight and as such the claims made in the literature overstate the usefulness of these measures in predicting market change.

The Influence of General Strikes on Stock Market Behavior

Using a sample of 76 countries, this paper examines the impact of major strikes against government and its policies on stock market behavior. An occurrence of a general strike is detrimental to the value of equities, as documented by the ceteris paribus 6.11% fall in dollar-denominated stock market indices of the affected countries. This event is also accompanied by a statistically significant increase in risk, as measured by the standard deviation of returns and Value-at-Risk metrics. Taken together, these results imply that general strikes have serious ramifications for stock market investors.

The efficacy of market abuse regulation in the UK

Purpose The purpose of this paper is to ascertain the efficacy of Financial Services and Markets Act (FMSA) (2000) in deterring illegal insider trading in target companies around the time of a merger and aquisition announcement. Design/methodology/approach The author uses an event study to measure the cumulative average abnormal returns (CAARs) around both the announcement and rumour date for a sample of UK takeovers between 2001 and 2010. Findings Statistically significant CAARs prior to the event date are observed across the sample. Research limitations/implications It is not possible to link unknown instances of illegal insider trading with pre takeover residuals, therefore explaining the residuals remains a deductive process. Practical implications Pre-event abnormal returns may indicate that trading on material nonpublic information is still a contributory factor in the run-up proportion of takeover premiums. Social implications This draws a question over the efficacy of the regulatory system. Originality/value This study provides evidence which points to insider trading activity ahead of Mergers in a post FMSA 200 UK context.