Insider Trading and Blackout Periods: Evidence from Italy

Using a unique hand-collected data set, we investigate the effectiveness of internal dealing regulation and self-imposed blackout periods on companies in Italy. While insiders comply with the internal dealing regulation in reporting their transactions, managers are still able to realize abnormal returns from their trades. We find that company self-imposed blackout periods are often violated as insiders continue trading around corporate events, to the point that managers realize their most profitable trades specifically during these periods.