This paper examines the relationship between ownership structure and informed trading. We attempt to reconcile some puzzling results in recent empirical literature about the impact of ownership on informed trading using a comprehensive set of proxies for informed trading and a recent sample of¯rms from three U.S equity exchanges. We¯nd strong evidence of a cross-sectional relationship between our measures of informed trading and ownership by institutions and insiders. Our results are robust to

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... variety of estimation techniques, control variables, and proxies for informed trading. These¯ndings are consistent with economies of scale in information acquisition and aggregation, and with recent¯ndings that market makers move prices in response to trades by institutions. Overall, our results suggest that individual investors are less informed relative to institutions and insiders.