Graduation Year


Date of Submission


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Eric Hughson

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Rights Information

© 2017 Connor D Stastny


Prior to the announcement of a merger or acquisition, the stock price of the target company often experiences a price run-up prior to the announcement of the transaction. This price run-up can be attributed to information leakage and insider trading. This paper examines how changes in the SEC’s budget effects the pre-announcement price run-up of mergers and acquisitions. Furthermore, this paper explores the political processes surrounding SEC budgeting, as well as flaws in the current system. This paper finds that with a $10 million increase in the SEC’s budget, the average pre-announcement run-up ratio decreases by 0.3%. The findings of this paper suggest a concrete means of reducing insider trading, dependent on an increase in SEC budget.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.