Insider Trades and Private Information: The Special Case of Delayed-Disclosure Trades |
| |
Authors: | Cheng, Shijun Nagar, Venky Rajan, Madhav V. |
| |
Affiliation: | University of Maryland |
| |
Abstract: | In certain circumstances, insider trades such as private transactionsbetween executives and their firms could be disclosed afterthe end of the firm's fiscal year, on a Form-5 filing. We findthat insider sales disclosed in such a delayed manner for largefirms are predictive of negative future returns (–6 to–8 percent), as well as lower future annual earnings relativeto analyst forecasts. These results stand in contrast to existingfindings on the uninformativeness of quickly disclosed open-marketinsider sales. The Sarbanes-Oxley Act curtailed the use of Form5 under the presumption that managers used this vehicle opportunistically.Our systematic evidence supports this presumption. |
| |
Keywords: | |
本文献已被 Oxford 等数据库收录! |
|