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I only fear when I hear: How media affects insider trading in takeover targets

Aleksanyan, Mark; Danbolt, Jo; Siganos, Antonios; Wu, Betty


Mark Aleksanyan

Jo Danbolt

Betty Wu


We study how target firm insiders respond to Wall Street Journal articles referring to illegal insider trading in past mergers. Such articles lead to target insider share purchases before bid announcement to drop by 75%. This effect is stronger nearer the bid announcement and increases with article visibility. It remains significant after controlling for public enforcement intensity, but is weakened by the greater potential for profitable trading. Our results suggest insider trading articles temporarily heighten the perception of litigation and reputation risks. Overall, our study indicates that such articles have a meaningful short-term deterrence effect on opportunistic insider trading, and highlights the disciplinary role of the media.


Aleksanyan, M., Danbolt, J., Siganos, A., & Wu, B. (2022). I only fear when I hear: How media affects insider trading in takeover targets. Journal of Empirical Finance, 67, 318-342.

Journal Article Type Article
Acceptance Date Apr 16, 2022
Online Publication Date Apr 20, 2022
Publication Date 2022-06
Deposit Date Apr 20, 2022
Publicly Available Date Apr 21, 2024
Print ISSN 0927-5398
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 67
Pages 318-342
Keywords Insider trading, Deterrence, Media coverage, Risk perception, Takeover targets
Public URL


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