Reactions to Corporate Insider’s Transactions: Do Legal Stock Market Disclosure Rules have an Impact?

We test the impact on security prices of top manager’s requirement’s to disclose their own share transactions in the firm. Specifically we study whether buy or sales transactions convey relevant information for market participants thereby studying the effects of legal stock market disclosure rules. Based on a comprehensive collection of stock market announcements from Danish CEOs and chairmen we find that insiders’ transactions influence share prices. However, it appears that there is a surprisingly difference, as buy transactions by chairmen have a much higher impact compared to CEO transactions, which to our knowledge have not been noticed already by others. Thus, our event study shows that the Danish stock market seems to be efficient in the semi-strong from.