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Insider Trading Prohibition in Germany and in the US. An Attempt in the Ethnography of Regulatory Enforcement

Csaba Győry
Eötvös Loránd University
Csaba Győry
Eötvös Loránd University
Open Panel

Abstract

When it comes to the actual text of the law, there is no great difference in the prohibition of insider trading in Germany and in the US. Yet the attention this part of financial regulation receives both by politicians and regulatory agencies couldn`t be more different. In the US, notwithstanding political and economic cycles, insider trading is always listed among the top priorities of regulatory enforcement, while no considerable resources are allocated to it in Germany. There has been many efforts in political economy to explain these differences. But so far no empirical research has been conducted on what factors actually influence the decisions of the officials involved in the enforcement process. In my paper I wish to summarize, against the backdrop of the works in political economy on insider trading, the results of a qualitative empirical study I have conducted among professionals ranging from low-level officials doing investigative work up to senior executives responsible of policy-level decisions both in Germany and the US.