Comments on: Bear(ish) Blogging http://www.concurringopinions.com/archives/2008/03/securities_law.html The Law, the Universe, and Everything Tue, 14 Feb 2012 05:18:12 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: dave hoffman http://www.concurringopinions.com/archives/2008/03/securities_law.html/comment-page-1#comment-49852 dave hoffman Fri, 21 Mar 2008 07:10:32 +0000 http://www.solove.org/archives/2008/03/bearish-blogging.html#comment-49852 I think the traditional theory on this (Manne) is that the insider trades would exert downward pressure on stock price directly and as information cascaded out. Check out bainbridge's article on the arguments (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=261277) which explores the (surprising) lack of empirical support for the intuition. I myself am not sure whether insider trading in Bear could have resulted in a smoother landing for the bank. On the other hand, it couldn't have been much worse. I think the traditional theory on this (Manne) is that the insider trades would exert downward pressure on stock price directly and as information cascaded out. Check out bainbridge’s article on the arguments (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=261277) which explores the (surprising) lack of empirical support for the intuition. I myself am not sure whether insider trading in Bear could have resulted in a smoother landing for the bank. On the other hand, it couldn’t have been much worse.

]]> By: deven http://www.concurringopinions.com/archives/2008/03/securities_law.html/comment-page-1#comment-49851 deven Fri, 21 Mar 2008 04:28:33 +0000 http://www.solove.org/archives/2008/03/bearish-blogging.html#comment-49851 Dave So if insiders traded it would provide better signals and the decline would have been less severe is your suggestion I think (please correct me if I am wrong). Would such trades be flagged so that folks know that the trades were by insiders? Also if a large amount of stock is held by insiders and they sell, it seems that the effect of "feeling sympathy" for those who were on the outside would recur. I guess more generally how might this insider signal work? I know you are teeing up thoughts for the future but I would love to knwo your thoughts here. Again if I misunderstood what you are saying my apologies. Dave

So if insiders traded it would provide better signals and the decline would have been less severe is your suggestion I think (please correct me if I am wrong).

Would such trades be flagged so that folks know that the trades were by insiders? Also if a large amount of stock is held by insiders and they sell, it seems that the effect of “feeling sympathy” for those who were on the outside would recur. I guess more generally how might this insider signal work? I know you are teeing up thoughts for the future but I would love to knwo your thoughts here. Again if I misunderstood what you are saying my apologies.

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