Researchers at Otago University believe insider traders gained almost $US2 billion in the lead-up to the global financial crisis.
Their new research paper, which is a collaborative work with the University of California Davis, worked to track the gains made and loses avoided, by those trading with inside information.
It has already been awarded a prize for the best paper on financial regulation by the Institute for the Study of Competition and Regulation, based at Victoria University.
The research looked at more 1718 disclosures of debt convenant violations by public companies in the United States between 2000 and 2007.
Dr David Lont , associate professor of accounting at Otago University, says share prices dropped between 2% - 3% when such breaches were announced.