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Journal Article

Do Insiders Play by the Rules?

William J. McNally and Brian F. Smith
Canadian Public Policy / Analyse de Politiques
Vol. 29, No. 2 (Jun., 2003), pp. 125-144
DOI: 10.2307/3552451
Stable URL: http://www.jstor.org/stable/3552451
Page Count: 20
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Do Insiders Play by the Rules?
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Abstract

Cet article étudie la question de la conformité entre la réglementation des transactions d'initiés de la Loi de l'Ontario sur les valeurs immobilières (Ontario Securities Act) (OSA) et la Bourse de Toronto. En contraste avec la rareté des poursuites judiciaires, nous trouvons une abondance de preuves de violations, s'agissant des transactions d'initiés et de la déclaration de celles-ci. Par exemple, de 1987 à 2000, environ 50 pour cent des entreprises qui ont procédé à des rachats de titres n'ont pas révélé leurs transactions à la Commission ontarienne des valeurs mobilières, ainsi que l'exige l'OSA. En outre, le volume des transactions entre initiés est beaucoup plus élevé qu'il n'était prévu avant les annonces importantes. Nous prescrivons un certain nombre de politiques destinées à assurer un plus grand respect de la loi. /// The article studies compliance with insider trading regulations of the Ontario Securities Act (OSA) and the Toronto Stock Exchange. In contrast to the scarcity of prosecutions, we find large-scale evidence of insider trading and reporting violations. For example, from 1987 to 2000, approximately 50 percent of firms engaging in stock buybacks do not disclose their trades to the Ontario Securities Commission as required under the OSA. Furthermore, the volume of insider trading is much higher than expected before material news announcements. We offer a number of policy prescriptions to improve compliance.

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