Private Information Acquisition via Freedom of Information Act Requests Made to the Securities and Exchange Commission

46 Pages Posted: 27 Apr 2020 Last revised: 1 Mar 2021

See all articles by Stephen Glaeser

Stephen Glaeser

University of North Carolina (UNC) at Chapel Hill - Accounting Area

Bryce Schonberger

University of Colorado at Boulder - Leeds School of Business

Charles E. Wasley

Simon School, University of Rochester

Jason J. Xiao

University of Rochester - Simon Business School

Date Written: February 27, 2021

Abstract

There is limited empirical evidence about when and why individuals incur costs to acquire information about a firm that is not publicly available, which we refer to as private information acquisition. This lack of evidence is due in large part to the difficulty of observing private information acquisition. To overcome this difficulty, we use Freedom of Information Act (FOIA) requests submitted to the Securities and Exchange Commission (SEC) for information that is not otherwise publicly available. We find that the perception of information asymmetry between managers and outsiders resulting from both proprietary and agency cost considerations triggers information acquisition via the FOIA process. A significant portion of FOIA search stems from non-investor groups, including law and intellectual property firms. Consistent with these stakeholders finding this information useful, we find that FOIA search is associated with changes in the competitive landscape and patent infringement and securities class action lawsuit filings.

Keywords: Freedom of Information Act, information acquisition, private information acquisition, disclosure, agency costs, proprietary costs, competition, lawsuits

JEL Classification: D82, D83, M41

Suggested Citation

Glaeser, Stephen and Schonberger, Bryce and Wasley, Charles E. and Xiao, Jason J., Private Information Acquisition via Freedom of Information Act Requests Made to the Securities and Exchange Commission (February 27, 2021). Available at SSRN: https://ssrn.com/abstract=3554850 or http://dx.doi.org/10.2139/ssrn.3554850

Stephen Glaeser

University of North Carolina (UNC) at Chapel Hill - Accounting Area ( email )

McColl Building
Chapel Hill, NC 27599
United States

Bryce Schonberger

University of Colorado at Boulder - Leeds School of Business ( email )

Boulder, CO 80309-0419
United States

Charles E. Wasley

Simon School, University of Rochester ( email )

Rochester, NY 14627
United States
585-275-3362 (Phone)
585-442-6323 (Fax)

Jason J. Xiao (Contact Author)

University of Rochester - Simon Business School ( email )

Rochester, NY 14627
United States

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