Insider trading in Korea Exchange worsens information inequality, study finds.
The study looked at insider trading in the Korean stock market to see if it helps or worsens the imbalance of information between investors. It found that local institutions, like big companies, often make trades based on secret information before official reports are released. This kind of insider trading can make it harder for regular investors to make good decisions, leading to higher costs. Surprisingly, small local investors tend to follow the lead of big institutions after these secret trades happen.