Evidence on Quasi-Private Information and Insider Trading
Martha L. Carter
Institutional Shareholder Services
David M. Reeb
National University of Singapore
March 24, 2009
Financial Analysts Journal, Vol. 59, No. 3, May/June 2003
We investigated the informational content of corporate insider buying activity and concluded that the market impact of insider transactions varies with the length of interval between insider buy transactions and the disclosure of information to the public. Analysis of a sample obtained from the Washington Services Insider Trade database indicates that (1) the informational content of insider transactions leaks out prior to the U.S. SEC announcement, (2) information leakage is positively associated with the length of the interval between the insider buying activity and the SEC announcement, (3) information leakage for CEOs and other officers differs only marginally, and (4) those insiders with the longest delay in reporting have the greatest total impact on stock prices. Our findings suggest that insiders are able to use their disclosure timing to manipulate the stock-price impact of their buying activity.
Number of Pages in PDF File: 22
Keywords: Portfolio Management, equity strategies, Portfolio Management, trading and execution
Date posted: September 30, 2003 ; Last revised: April 21, 2014
© 2016 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollobot1 in 0.234 seconds