Evidence on Quasi-Private Information and Insider Trading

Posted: 20 Sep 2002

See all articles by Martha L. Carter

Martha L. Carter

Institutional Shareholder Services

Sattar Mansi

Virginia Polytechnic Institute & State University

David M. Reeb

National University of Singapore

Multiple version iconThere are 3 versions of this paper

Abstract

We investigate the informational content of corporate insider buying activity and argue that the market impact of insiders' transactions varies based on the length of interval between the insider buying activity and the disclosure of information to the public. Based on a sample obtained from the Washington Service Insider Trade database, we find that (i) the informational content of insider transactions leaks out prior to the SEC announcement, (ii) information leakage is positively associated with the length of the interval between the insider buying activity and the SEC announcement, (iii) information leakage is only marginally different between CEOs and other officers, and (iv) those insiders with the longest delay in reporting have the greatest total impact on stock prices. The findings suggest that insiders are able to manipulate the impact of their buying activity on stock prices with their disclosure timing.

Keywords: Insider Trading, Quasi Private Information, Disclosure Timing

JEL Classification: D4

Suggested Citation

Carter, Martha L. and Mansi, Sattar and Reeb, David M., Evidence on Quasi-Private Information and Insider Trading. Forthcoming in Financial Analyst Journal. Available at SSRN: https://ssrn.com/abstract=332322

Martha L. Carter

Institutional Shareholder Services ( email )

2099 Gaither Road, Suite 501
Rockville, MD 20850
United States

Sattar Mansi (Contact Author)

Virginia Polytechnic Institute & State University ( email )

David M. Reeb

National University of Singapore ( email )

Mochtar Riady Building
15 Kent Ridge Drive
Singapore, 119245
Singapore

HOME PAGE: http://www.davidreeb.net

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
670
PlumX Metrics