I only fear when I hear: How media affects insider trading in takeover targets

Mark Aleksanyan, Jo Danbolt, Antonios Siganos, Betty Wu*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


We study how target firm insiders respond to Wall Street Journal articles referring to illegal insider trading in past mergers. Such articles lead to target insider share purchases before bid announcement to drop by 75%. This effect is stronger nearer the bid announcement and increases with article visibility. It remains significant after controlling for public enforcement intensity, but is weakened by the greater potential for profitable trading. Our results suggest insider trading articles temporarily heighten the perception of litigation and reputation risks. Overall, our study indicates that such articles have a meaningful short-term deterrence effect on opportunistic insider trading, and highlights the disciplinary role of the media.
Original languageEnglish
Pages (from-to)318-342
Number of pages25
JournalJournal of Empirical Finance
Early online date20 Apr 2022
Publication statusPublished - Jun 2022


  • insider trading
  • deterrence
  • media coverage
  • risk perception
  • takeover targets


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