While insider trading has been regulated in the vast majority of countries with financial markets, the efficacy of these regulations has only been sparsely examined. In this paper we examine the impact of major regulatory changes in New Zealand on the profitability and informational basis of insider transactions. We conclude that the law changes have both significantly reduced the profitability of insider trading and forced insiders to change the source of the information they use from private information to knowledge of market misvaluation. The results show that well constructed insider trading laws can be effective in controlling insider behaviour and profitability.