Hazem Daouk

Who is Hazem Daouk?

Hazem Daouk is a financial economist, known for his work on securities regulation, especially insider trading, earnings management and short selling. He is the Peter J. & Stephanie J. Nolan Associate Professor in the Charles H. Dyson School of Applied Economics and Management at Cornell University. His articles have been cited over 2000 times.

In 1998, his research uncovered the rampant insider trading on the Mexican Stock Exchange. This led to many questions about the value and the enforceability of insider trading laws. The study won the Best Academic Paper Award offered by the International Investment Forum at the University of Chicago.

In later research, Daouk conducted a comprehensive survey of insider trading laws and prosecution in about a hundred countries that have a stock market. He then showed that countries that enforce insider trading laws reduce the cost of financing of companies by many percentage points. This is because outside investors no longer require to be compensated for the money they lose from trading with better-informed insiders. On the other hand, having the law without enforcing it, does not do anything. This research was nominated for the Smith Breeden Prize for Best Paper in the Journal of Finance for the year 2002.