" A Preliminary Examination of Insider Trading around Takeover Announcements in Australia

We are grateful to participants at UWA's Accounting and Finance Workshop Series for their valuable comments. Finally we would also like to take this opportunity to acknowledge SIRCA's support in providing access to core elements of data. Abstract This study is the first to empirically analyse insider trading around takeover announcements in Australia. This paper provides preliminary evidence, employing data from the period January 1996 to June 1998, that insider trading occurs surrounding takeover announcements. Buy activity is significant both early in the event window and then again immediately prior to the announcement. This latter finding is interesting as it suggests certain disregard for the regulatory authorities. The results also indicate that informational hierarchy exists, as the trading pattern of executive directors is significantly different to that of non-executive directors.