SSRN-Do Corporate Insiders Prefer Nasdaq? by Stanley Peterburgsky

Interesting take on Rule 144. The rule sets conditions when in the SEC's words there can be

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"...public resale of restricted and control securities if a number of conditions are met...."

included in these conditions is a volume condition:

"Trading Volume Formula. If you are an affiliate, the number of equity securities you may sell during any three-month period cannot exceed the greater of 1% of the outstanding shares of the same class being sold, or if the class is listed on a stock exchange or quoted on Nasdaq, the greater of 1% or the average reported weekly trading volume during the four weeks preceding the filing a notice of sale on Form 144."

Which brings us to the paper by Peterburgsky:

SSRN-Do Corporate Insiders Prefer Nasdaq? by Stanley Peterburgsky:

"I examine whether the double-counting of reported trading volume on Nasdaq plays a role in insiders’ decisions to move their firms. Specifically, since volume on Nasdaq is exaggerated and SEC Rule 144 ties the limit on insider selling to total volume, insiders of troubled firms may be able to use private information to take advantage of other shareholders by switching to Nasdaq and unloading more stock. Consistent with the hypothesis, I find that insiders engage in heavy selling of company stock in the months following the move. Post-announcement abnormal returns are strongly negative."