Over the years, the US Congress has substantially increased the penalties for insider trading by enacting the
Insider Trading Sanctions Act of 1984 and the Insider Trading and Securities Fraud Enforcement Act of 1988.
In 1984 Congress passed the
Insider Trading Sanctions Act of 1984 (ITSA), which provides for up to three times the insiders' illegal profits in civil penalties and a tenfold increase in criminal penalties (from $10,000 to $100,000).
SEC enforcement actions and the Insider Trading Sanctions Act of 1984 ("ITSA")(64) have expanded the scope of insider trading liability, although no legislative definition of insider trading exists.
Langevoort, The Insider Trading Sanctions Act of 1984 and Its Effect on Existing Law, 37 Vand.
1985, "Penalizing Insider Trading: A Critical Assessment of the
Insider Trading Sanctions Act of 1984," Duke Law Journal (November), 960-1025.
Significant changes in regulatory sanctions during the 1980s, particularly passage of the Insider Trading Sanctions Act of 1984, were designed to increase expected costs of illegal insider trading.
Table 5 compares abnormal insider trading activity for the period prior to passage of the Insider Trading Sanctions Act of 1984 and for the period following its passage.
We focus on the transactions of registered insiders preceding tender offer announcements; specifically, we examine the volume and the profitability of registered insider trading in target firms' shares over two distinct regulatory "eras" - before and after the passage of the Insider Trading Sanctions Act of 1984.
This paper investigates the incidence of registered insider trading and its two profitability in tender-offer-related transactions in two regulatory "eras" - before and after the passage of the Insider Trading Sanctions Act of 1984.
