On the ban of insider trading

Banning insider trading doesn't improve the fairness at stock exchanges. This is the result of an experiment by Thomas Stöckl and Stefan Palan. On the contrary: If insider trade takes place, even those traders benefit who were not informed ex ante.

The article is published in the Journal of Financial Markets. You can find a summary thereof in the newsroom   of our university, and download the original article through the link in the info-box below.

Palan, Stefan und Stöckl, Thomas (2017): When chasing the offender hurts the victim: The case of insider legislation. Journal of Financial Markets 35(2017), pp. 104-129, doi: 10.1016/j.finmar.2016.07.002   (open access).