Insider Trading Jf July 1992

2313 WordsJul 4, 201310 Pages
Section I reviews the history of Anheuser-Busch’s acquisition of Campbell Taggart, explains how the inside information was generated and transmitted, and describes the insider trading data. Section II discusses some empirical implications of models of informed trading. Section III presents the empirical results, including a trade-by-trade analysis of the behavior of Campbell Taggart’s stock price in response to the insider trading. The final section discusses the implications of the findings and. summarizes our conclusions. I. The Acquisition of Campbell Taggart by Anheuser-Busch A. Acquisition History The history of Anheuser—Busch’s acquisition of Campbell Taggart is drawn from publicly available documents filed in the case of…show more content…
Table I Insider Trading Activity in Campbell Taggart from June 30 to August 2, 1982 The columns of the table give the date, the closing price of Campbell Taggart on the NYSE, the total daily trading volume of Campbell Taggart (in thousands of shares), the number of insider trades, the number of insiders who traded, and the total volume of shares purchased by insiders (in thousands), respectively. In all, the insiders bought shares in Campbell Taggart in 124 transactions, acquiring a total 265,600 shares over 23 trading days. B. Extent of the Information Diffusion The analysis in Section III assumes that all trades not made by one of the 38 insiders are uninformed trades. It is critical to verify the soundness of this assumption. If it is not true, then conclusions based on the estimates of trade informativeness will be incorrect. There are several reasons for believing that there was no direct information leakage to other traders outside of the identified group of 38 individuals. First, our sample arose through the costly and extraordinary effort of Anheuser-Busch in preparation for civil litigation against brokerage firms that employed two of the key insiders. Attorneys for Anheuser-Busch began by deposing all the individuals identified by Mr. Thayer as having received information from him. Anyone identified in those depositions was subsequently deposed. The process continued until all tippees identified in

More about Insider Trading Jf July 1992

Open Document