Insider Trading in Large Canadian Banks

Abstract

The aim of this study is, on the one hand, to determine if directors of large Canadian banks obtained abnormal returns by buying or selling their own bank stocks and, on the other hand, to evaluate market reaction when these transactions were made public. Our results show that markets reacted more to the selling of stocks as opposed to the buying of stocks. They also show that directors of large Canadian banks did not seem to profit excessively by buying stocks and that they had sold their stocks strategically as a result of higher value on stock exchanges.