부정적 사건 전 내부자거래 행태

We investigate the insider trading behavior before the disclosure of negative events. Specifically, we examine whether insider sales increase before a negative event occurs, when they concentrate, and whether corporate governance plays an active role in monitoring insider trading. The major findings of the study are as follows. First, the stock prices of firms with negative events decline about 10 months before the negative events. Insider trades by executives and largest shareholders show significant net selling behavior at least 24 months before the negative events. It is interpreted that insiders with private information about firm’s future negative events sell stock in advance to avoid losses. Second, foreign investors or institutional investors do not play a significant role in monitoring opportunistic insider trading before negative events such as accounting fraud detection and administrative issues designation. Third, insider sales of ‘10% or more major shareholders’ occurred much later than those of ‘executives and largest shareholders’. It could be due to the different ability of the insider to access the inside information of the firm. This study extends the scope of related research by analyzing the insider transactions that occur before negative events such as detection of fraud or administrative issues designation in Korea. In addition, the results of this study show that insider trading occurs two years before the negative event, which provides useful insights for the regulatory authorities in charge of preventing unfair insider trading in the capital market