The agency origins of insider trading
Insider trading has been a topical issue in recent times. While the debate regarding insider trading usually extends to economic and ethical arguments in favour of or against the practice, in this article we attempt to ascertain the causes of the practice. The origins of insider trading are traced t...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
AOSIS
1991-12-01
|
| Series: | South African Journal of Business Management |
| Online Access: | https://sajbm.org/index.php/sajbm/article/view/905 |
| Summary: | Insider trading has been a topical issue in recent times. While the debate regarding insider trading usually extends to economic and ethical arguments in favour of or against the practice, in this article we attempt to ascertain the causes of the practice. The origins of insider trading are traced to the separation of ownership and control. It has been argued that insider trading is beneficial to minority shareholders and reduces the agency cost problem; this is shown to be fallacious. The authors conclude that insider trading is an agency problem and that the disciplinary mechanisms described in the literature do not inhibit the phenomena, indeed some of these mechanisms actually facilitate the occurrence of insider trading. This it is argued provides the rationale for government intervention and anti-insider trading legislation.
Binnekringtransaksies het onlangs heelwat opspraak gewek. Die debat oor binnekringtransaksies bestaan hoofsaaklik uit die aanvoer van ekonomiese of etiese argumente vir of teen die praktyk. In hierdie artikel word gepoog om die oorsake van hierdie praktyk vas te stel. Die oorsprong van binnekringtransaksies word teruggevoer na die skeiding van eienaarskap en beheer. Daar is al aangevoer dat binnekringtransaksies tot die voordeel van minderheidsaandeelhouers strek, aangesien dit die agentskapsprobleem verminder, maar in hierdie artikel word aangetoon dat dit nie die geval is nie. Die skrywers kom tot die gevolgtrekking dat binnekringtransaksies 'n agentskapsprobleem is en dat die meganismes, wat volgens die literatuur hierdie praktyk aan bande behoort te le, dit in werklikheid vergemaklik. Daar word ook aangevoer dat die beweegrede vir optrede deur die staat, asook wetgewing om binnekringtransaksies te bekamp, hieruit voortspruit. |
|---|---|
| ISSN: | 2078-5585 2078-5976 |