{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2025,8,2]],"date-time":"2025-08-02T17:41:38Z","timestamp":1754156498870,"version":"3.41.2"},"reference-count":52,"publisher":"Emerald","issue":"5","license":[{"start":{"date-parts":[[2023,10,31]],"date-time":"2023-10-31T00:00:00Z","timestamp":1698710400000},"content-version":"tdm","delay-in-days":0,"URL":"https:\/\/www.emerald.com\/insight\/site-policies"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["SEF"],"published-print":{"date-parts":[[2023,11,13]]},"abstract":"<jats:sec><jats:title content-type=\"abstract-subheading\">Purpose<\/jats:title><jats:p>This study aims to examine the deterrent effect of the Market Abuse Directive (MAD) introduced in the European Union in 2003. The purpose is to evaluate whether the Directive has resulted in significant changes in pre-bid stock price run-ups observed in mergers and acquisitions within the Portuguese, Spanish and Greek stock markets.<\/jats:p><\/jats:sec><jats:sec><jats:title content-type=\"abstract-subheading\">Design\/methodology\/approach<\/jats:title><jats:p>The study analyzes a sample of 199 mergers and acquisitions in the aforementioned stock markets. The magnitude of pre-bid stock price run-ups is investigated as an indicator of illegal insider trading. The effects of the MAD, toehold positions of bidders and industry similarity between firms involved in the deals are assessed using statistical analysis.<\/jats:p><\/jats:sec><jats:sec><jats:title content-type=\"abstract-subheading\">Findings<\/jats:title><jats:p>The study\u2019s findings indicate that the MAD has been ineffective in deterring investors from trading on non-public information. Pre-announcement price run-ups remain significant, suggesting ongoing illegal insider trading practices. Additionally, the research reveals that pre-bid stock price run-ups tend to be lower when bidders have established a larger toehold position in the target and when the firms involved in the deal belong to the same industry.<\/jats:p><\/jats:sec><jats:sec><jats:title content-type=\"abstract-subheading\">Originality\/value<\/jats:title><jats:p>This study contributes to the existing literature by providing empirical evidence on the ineffectiveness of the MAD in deterring illegal insider trading. The findings highlight the limitations of increasing penalties without an effective monitoring system in place. Furthermore, the study identifies additional factors, such as toehold positions and industry similarity, that influence the magnitude of pre-announcement price run-ups in mergers and acquisitions.<\/jats:p><\/jats:sec>","DOI":"10.1108\/sef-06-2023-0327","type":"journal-article","created":{"date-parts":[[2023,10,27]],"date-time":"2023-10-27T23:46:20Z","timestamp":1698450380000},"page":"913-931","source":"Crossref","is-referenced-by-count":0,"title":["The impact of the Market Abuse Directive on illegal insider trading: evidence from three Southern European stock markets"],"prefix":"10.1108","volume":"40","author":[{"given":"J\u00falio","family":"Lob\u00e3o","sequence":"first","affiliation":[]},{"given":"Sofia P.","family":"Baptista","sequence":"additional","affiliation":[]}],"member":"140","published-online":{"date-parts":[[2023,10,31]]},"reference":[{"key":"key2023111109061632300_ref001","doi-asserted-by":"crossref","first-page":"105730","DOI":"10.1016\/j.jbankfin.2019.105730","article-title":"Market in financial instruments directive (MiFID), stock price informativeness and liquidity","volume":"113","year":"2020","journal-title":"Journal of Banking and Finance"},{"issue":"1","key":"key2023111109061632300_ref002","doi-asserted-by":"crossref","first-page":"26","DOI":"10.1016\/j.jfineco.2017.03.009","article-title":"Information networks: evidence from illegal insider trading tips","volume":"125","year":"2017","journal-title":"Journal of Financial Economics"},{"issue":"7","key":"key2023111109061632300_ref003","doi-asserted-by":"crossref","first-page":"2050","DOI":"10.1093\/rfs\/hhv006","article-title":"Rumor has it: sensationalism in financial media","volume":"28","year":"2015","journal-title":"The Review of Financial Studies"},{"issue":"4","key":"key2023111109061632300_ref004","doi-asserted-by":"crossref","first-page":"490","DOI":"10.1093\/oxrep\/grh029","article-title":"Financial systems in Europe, the USA, and asia","volume":"20","year":"2004","journal-title":"Oxford Review of Economic Policy"},{"issue":"3","key":"key2023111109061632300_ref005","doi-asserted-by":"crossref","first-page":"1324","DOI":"10.1016\/j.jfineco.2021.05.012","article-title":"M&A rumors about unlisted firms","volume":"142","year":"2021","journal-title":"Journal of Financial Economics"},{"issue":"2","key":"key2023111109061632300_ref006","doi-asserted-by":"crossref","first-page":"103","DOI":"10.1257\/jep.15.2.103","article-title":"New evidence and perspectives on mergers","volume":"15","year":"2001","journal-title":"Journal of Economic Perspectives"},{"key":"key2023111109061632300_ref007","doi-asserted-by":"crossref","first-page":"27","DOI":"10.1016\/j.intfin.2017.05.004","article-title":"Corporate insider trading in Europe","volume":"54","year":"2018","journal-title":"Journal of International Financial Markets Institutions and Money"},{"key":"key2023111109061632300_ref008","first-page":"1022","article-title":"Insider trading in a rational expectations economy","volume":"80","year":"1990","journal-title":"American Economic Review"},{"article-title":"Legal institutions and financial development","volume-title":"Handbook of New Institutional Economics","year":"2005","key":"key2023111109061632300_ref009"},{"issue":"2","key":"key2023111109061632300_ref010","doi-asserted-by":"crossref","first-page":"137","DOI":"10.1016\/S0304-405X(03)00144-2","article-title":"Law, endowments, and finance","volume":"70","year":"2003","journal-title":"Journal of Financial Economics"},{"issue":"2","key":"key2023111109061632300_ref011","doi-asserted-by":"crossref","first-page":"169","DOI":"10.1086\/259394","article-title":"Crime and punishment: an economic approach","volume":"76","year":"1968","journal-title":"Journal of Political Economy"},{"key":"key2023111109061632300_ref012","first-page":"237","article-title":"Insider trading laws and stock markets around the world: an empirical contribution to the theoretical law and economics debate","volume":"32","year":"2007","journal-title":"Journal of Corporation Law"},{"issue":"1","key":"key2023111109061632300_ref013","doi-asserted-by":"crossref","first-page":"39","DOI":"10.1016\/0304-405X(94)00798-6","article-title":"Diversification\u2019s effect on firm value","volume":"37","year":"1995","journal-title":"Journal of Financial Economics"},{"issue":"2","key":"key2023111109061632300_ref014","doi-asserted-by":"crossref","first-page":"191","DOI":"10.1016\/S0304-405X(00)00055-6","article-title":"Corporate policies restricting trading by insiders","volume":"57","year":"2000","journal-title":"Journal of Financial Economics"},{"issue":"1","key":"key2023111109061632300_ref015","doi-asserted-by":"crossref","first-page":"75","DOI":"10.1111\/1540-6261.00416","article-title":"The world price of insider trading","volume":"57","year":"2002","journal-title":"The Journal of Finance"},{"issue":"3","key":"key2023111109061632300_ref016","doi-asserted-by":"crossref","first-page":"1141","DOI":"10.1111\/0022-1082.00359","article-title":"Insider trading, investment, and liquidity: a welfare analysis","volume":"56","year":"2001","journal-title":"The Journal of Finance"},{"issue":"26","key":"key2023111109061632300_ref017","doi-asserted-by":"crossref","first-page":"3723","DOI":"10.1080\/00036846.2012.730134","article-title":"Abnormal returns before acquisition announcements: evidence from Europe","volume":"45","year":"2013","journal-title":"Applied Economics"},{"issue":"2","key":"key2023111109061632300_ref018","doi-asserted-by":"crossref","first-page":"185","DOI":"10.1016\/j.jeconbus.2011.11.003","article-title":"Sources of target stock price run-up prior to acquisitions","volume":"64","year":"2012","journal-title":"Journal of Economics and Business"},{"issue":"3","key":"key2023111109061632300_ref019","doi-asserted-by":"crossref","first-page":"267","DOI":"10.1111\/j.1354-7798.2005.00285.x","article-title":"Do insider trading laws work?","volume":"11","year":"2005","journal-title":"European Financial Management"},{"issue":"1","key":"key2023111109061632300_ref020","doi-asserted-by":"crossref","first-page":"3","DOI":"10.1016\/0304-405X(85)90042-X","article-title":"Using daily stock returns: the case of event studies","volume":"14","year":"1985","journal-title":"Journal of Financial Economics"},{"key":"key2023111109061632300_ref021","doi-asserted-by":"crossref","first-page":"13","DOI":"10.1016\/j.irfa.2015.05.006","article-title":"Takeover rumors: returns and pricing of rumored targets","volume":"41","year":"2015","journal-title":"International Review of Financial Analysis"},{"issue":"11","key":"key2023111109061632300_ref022","doi-asserted-by":"crossref","first-page":"2885","DOI":"10.1093\/rfs\/hhw055","article-title":"Capital-market effects of securities regulation: prior conditions, implementation, and enforcement","volume":"29","year":"2016","journal-title":"Review of Financial Studies"},{"key":"key2023111109061632300_ref023","doi-asserted-by":"crossref","first-page":"101669","DOI":"10.1016\/j.jcorpfin.2020.101669","article-title":"Anti-selective disclosure regulation and analyst forecast accuracy and usefulness","volume":"64","year":"2020","journal-title":"Journal of Corporate Finance"},{"issue":"2","key":"key2023111109061632300_ref024","doi-asserted-by":"crossref","first-page":"454","DOI":"10.1093\/aler\/ahn009","article-title":"Global market surveillance","volume":"10","year":"2008","journal-title":"American Law and Economics Review"},{"key":"key2023111109061632300_ref025","first-page":"425","article-title":"Capital-market effects of securities regulation: prior conditions, implementation, and enforcement revisited","volume":"31","year":"2019","journal-title":"Finance Research Letters"},{"key":"key2023111109061632300_ref026","doi-asserted-by":"crossref","first-page":"130","DOI":"10.1016\/j.intfin.2018.03.006","article-title":"Same rules, different enforcement: market abuse in Europe","volume":"54","year":"2018","journal-title":"Journal of International Financial Markets Institutions and Money"},{"issue":"3","key":"key2023111109061632300_ref027","doi-asserted-by":"crossref","first-page":"651","DOI":"10.1016\/j.jfineco.2010.10.001","article-title":"Exchange trading rules and stock market liquidity","volume":"99","year":"2011","journal-title":"Journal of Financial Economics"},{"issue":"2","key":"key2023111109061632300_ref028","doi-asserted-by":"crossref","first-page":"143","DOI":"10.1016\/0304-405X(86)90059-0","article-title":"Corporate mergers and security returns","volume":"16","year":"1986","journal-title":"Journal of Financial Economics"},{"issue":"2","key":"key2023111109061632300_ref029","doi-asserted-by":"crossref","first-page":"489","DOI":"10.1093\/rof\/rft010","article-title":"Regulating conflicts of interest: the effect of sanctions and enforcement","volume":"18","year":"2014","journal-title":"Review of Finance"},{"issue":"2","key":"key2023111109061632300_ref030","doi-asserted-by":"crossref","first-page":"487","DOI":"10.1111\/fima.12331","article-title":"A rundown of merger target run-ups","volume":"50","year":"2021","journal-title":"Financial Management"},{"issue":"2","key":"key2023111109061632300_ref031","doi-asserted-by":"crossref","first-page":"60","DOI":"10.1002\/isaf.1446","article-title":"How to detect illegal corporate insider trading? A data mining approach for detecting suspicious insider transaction","volume":"26","year":"2019","journal-title":"Intelligent Systems in Accounting, Finance and Management"},{"issue":"2","key":"key2023111109061632300_ref032","doi-asserted-by":"crossref","first-page":"877","DOI":"10.1086\/499141","article-title":"On the patterns and wealth effects of vertical mergers","volume":"79","year":"2006","journal-title":"The Journal of Business"},{"issue":"3","key":"key2023111109061632300_ref033","first-page":"461","article-title":"Insider trading and the market abuse directive: are voluntary and mandatory takeover bids different?","volume":"7","year":"2019","journal-title":"Italian Economic Journal"},{"key":"key2023111109061632300_ref034","doi-asserted-by":"crossref","first-page":"66","DOI":"10.1016\/j.jempfin.2017.08.001","article-title":"Profitability of insider trading in Europe: a performance evaluation approach","volume":"44","year":"2017","journal-title":"Journal of Empirical Finance"},{"issue":"2","key":"key2023111109061632300_ref035","doi-asserted-by":"crossref","first-page":"329","DOI":"10.1016\/0304-405X(87)90008-0","article-title":"Target abnormal returns associated with acquisition announcements: payment, acquisition form, and managerial resistance","volume":"19","year":"1987","journal-title":"Journal of Financial Economics"},{"issue":"2","key":"key2023111109061632300_ref036","first-page":"225","article-title":"Stock trading before the announcement of tender offers: insider trading or market anticipation?","volume":"5","year":"1989","journal-title":"Journal of Law Economics and Organization"},{"issue":"1\/4","key":"key2023111109061632300_ref037","first-page":"50","article-title":"The market for corporate-control \u2013 the scientific evidence","volume":"11","year":"1983","journal-title":"Journal of Financial Economics"},{"issue":"4","key":"key2023111109061632300_ref038","doi-asserted-by":"crossref","first-page":"1361","DOI":"10.1111\/j.1540-6261.1991.tb04621.x","article-title":"Insider trading around dividend announcements","volume":"46","year":"1991","journal-title":"The Journal of Finance"},{"issue":"4","key":"key2023111109061632300_ref039","doi-asserted-by":"crossref","first-page":"699","DOI":"10.1111\/j.1755-053X.2009.01053.x","article-title":"Prebid run\u2010ups ahead of Canadian takeovers: how big is the problem?","volume":"38","year":"2009","journal-title":"Financial Management"},{"issue":"1","key":"key2023111109061632300_ref040","doi-asserted-by":"crossref","first-page":"1","DOI":"10.1111\/j.1540-6261.2006.00828.x","article-title":"What works in securities laws?","volume":"61","year":"2006","journal-title":"The Journal of Finance"},{"key":"key2023111109061632300_ref041","doi-asserted-by":"crossref","first-page":"22","DOI":"10.1016\/j.irle.2018.11.002","article-title":"How to test an insider trading law and its effectiveness: price movements and comparative empirical data from Taiwan","volume":"57","year":"2019","journal-title":"International Review of Law and Economics"},{"issue":"2","key":"key2023111109061632300_ref042","doi-asserted-by":"crossref","first-page":"208","DOI":"10.1111\/j.1468-036X.2009.00497.x","article-title":"The performance of the European market for corporate control: evidence from the fifth takeover wave","volume":"17","year":"2011","journal-title":"European Financial Management"},{"issue":"4","key":"key2023111109061632300_ref043","doi-asserted-by":"crossref","first-page":"333","DOI":"10.2307\/2098435","article-title":"Insider trading and the value of the firm","volume":"39","year":"1991","journal-title":"The Journal of Industrial Economics"},{"issue":"5","key":"key2023111109061632300_ref044","doi-asserted-by":"crossref","first-page":"1661","DOI":"10.1111\/j.1540-6261.1992.tb04679.x","article-title":"An empirical analysis of illegal insider trading","volume":"47","year":"1992","journal-title":"The Journal of Finance"},{"issue":"3","key":"key2023111109061632300_ref045","doi-asserted-by":"crossref","first-page":"559","DOI":"10.1016\/j.dss.2010.08.006","article-title":"The application of data mining techniques in financial fraud detection: a classification framework and an academic review of literature","volume":"50","year":"2011","journal-title":"Decision Support Systems"},{"issue":"3","key":"key2023111109061632300_ref046","doi-asserted-by":"crossref","first-page":"3373","DOI":"10.1002\/ijfe.2325","article-title":"Insider trading in the run-up to merger announcements. Before and after the Uk\u2019s financial services act 2012","volume":"27","year":"2022","journal-title":"International Journal of Finance and Economics"},{"issue":"3","key":"key2023111109061632300_ref047","doi-asserted-by":"crossref","first-page":"291","DOI":"10.1086\/296508","article-title":"Clearly heard on the street: the effect of takeover rumours on stock prices","volume":"63","year":"1990","journal-title":"The Journal of Business"},{"issue":"1","key":"key2023111109061632300_ref048","doi-asserted-by":"crossref","first-page":"109","DOI":"10.2307\/2331301","article-title":"Target firm abnormal returns and trading volume around the initiation of change in control transactions","volume":"27","year":"1992","journal-title":"The Journal of Financial and Quantitative Analysis"},{"issue":"2","key":"key2023111109061632300_ref049","doi-asserted-by":"crossref","first-page":"153","DOI":"10.1016\/0304-405X(95)00865-C","article-title":"Markup pricing in mergers and acquisitions","volume":"41","year":"1996","journal-title":"Journal of Financial Economics"},{"issue":"1","key":"key2023111109061632300_ref050","doi-asserted-by":"crossref","first-page":"23","DOI":"10.2307\/3666053","article-title":"Insider trading following material news events: evidence from earnings","volume":"23","year":"1994","journal-title":"Financial Management"},{"issue":"3","key":"key2023111109061632300_ref051","doi-asserted-by":"crossref","first-page":"313","DOI":"10.1016\/S0304-405X(03)00173-9","article-title":"Culture, openness and finance","volume":"70","year":"2003","journal-title":"Journal of Financial Economics"},{"issue":"2","key":"key2023111109061632300_ref052","doi-asserted-by":"crossref","first-page":"801","DOI":"10.1111\/j.1911-3846.1995.tb00467.x","article-title":"Disclosure policy, information asymmetry, and liquidity in equity markets","volume":"11","year":"1995","journal-title":"Contemporary Accounting Research"}],"container-title":["Studies in Economics and Finance"],"original-title":[],"language":"en","link":[{"URL":"https:\/\/www.emerald.com\/insight\/content\/doi\/10.1108\/SEF-06-2023-0327\/full\/xml","content-type":"application\/xml","content-version":"vor","intended-application":"text-mining"},{"URL":"https:\/\/www.emerald.com\/insight\/content\/doi\/10.1108\/SEF-06-2023-0327\/full\/html","content-type":"unspecified","content-version":"vor","intended-application":"similarity-checking"}],"deposited":{"date-parts":[[2025,7,24]],"date-time":"2025-07-24T22:51:06Z","timestamp":1753397466000},"score":1,"resource":{"primary":{"URL":"http:\/\/www.emerald.com\/sef\/article\/40\/5\/913-931\/345340"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2023,10,31]]},"references-count":52,"journal-issue":{"issue":"5","published-online":{"date-parts":[[2023,10,31]]},"published-print":{"date-parts":[[2023,11,13]]}},"alternative-id":["10.1108\/SEF-06-2023-0327"],"URL":"https:\/\/doi.org\/10.1108\/sef-06-2023-0327","relation":{},"ISSN":["1086-7376","1086-7376"],"issn-type":[{"type":"print","value":"1086-7376"},{"type":"electronic","value":"1086-7376"}],"subject":[],"published":{"date-parts":[[2023,10,31]]}}}