The purpose of this thesis is to broaden the research field and contribute with a new perspective regarding insider trading and insiders’ ability to avoid negative abnormal return. An event study framework is applied to examine market efficiency on Swedish stock market. Market model is used as an equilibrium model for identifying abnormal returns. The theoretical framework is built on efficient market hypothesis, concept of information asymmetry and signaling hypothesis. The data about insider transactions and stock performance for time period 2000 to 2010 is studied. The findings contradict the efficient market hypothesis in its strongest form. Insiders in Swedish listed firms are able to avoid wealth decrease by selling their shares prior to decline in stock price
