This paper examine the information content of insider trading before a large drop in the stock price. We hypothesize that, to avoid litigation risk, rational insiders do not sell own-firm shares when they anticipate crashes. Specifically, sales by top shareholders in the distant past is positively correlated with the likelihood of a crash, while sales by insiders in the recent past is not significantly associated with the probability of a crash. On the contrary to this, sales by other insiders in the distant past is negatively correlated with the likelihood of a crash, and sales in the recent past is positively correlated with the likelihood of a crash. These findings suggests that the top shareholders appear to be aware of the effect of their selling on litigation risk and reduce their opportunistic sales prior to a crash. On the contrast, low-litigation-risk insiders sold opportunistically. Also, this finding stronger in firms has access to more private information.