Insider trading poses special problems the context of mergers and acquisitions. Announcement of mergers and acquisitions (or take-over offers) often involve price sensitive information. In the ideal world, there would be complete confidentiality prior to the announcement of a take-over offer. However the planning of the take-over offer will often involve people who are in possession of confidential price sensitive information and the risk of leaks increases as more people are in the know. This paper highlights some of the insider trading issues and practical problems that are encountered on the propriety of dealings prior to the public announcement of a take-over offer, the issues relating to the communication of inside information to the prospective offeror by the target company or the vendor and the use of inside information in the course of the take-over offer. This paper suggests certain areas for reform, particularly relating to the exceptions and defences to insider trading in the context of take-overs.
- Insider trading,
- mergers and acquisitions
Available at: http://works.bepress.com/waiyee_wan/8/