Does Analyst Disclosure Matter? A Real-Time Analysis

28 Pages Posted: 15 Mar 2006

See all articles by Joseph Engelberg

Joseph Engelberg

University of California, San Diego (UCSD) - Rady School of Management

Caroline Sasseville

Kellogg School of Management - Department of Finance

Jared Williams

University of South Florida

Date Written: February 20, 2007

Abstract

We examine in real-time the recommendations made by analysts on the CNBC segment Making Money Now. The recommendations are followed by mandatory disclosures following Title V of the Sarbanes Oxley Act of 2002 and NYSE and NASD rules. We measure reaction to both the recommendation event and the disclosure event. There is an immediate response in price, volume and order flow following the recommendation event and no response following the disclosure event. We find no evidence in our regressions that investors respond to the information contained in the ownership disclosures. We speculate that investors might not respond to the disclosures because it is not clear how they should respond to the information.

Keywords: analyst conflict of interest, analyst recommendation, disclosure, Sarbanes Oxley, CNBC

JEL Classification: G28, G38, K22, M49

Suggested Citation

Engelberg, Joseph and Sasseville, Caroline and Williams, Jared, Does Analyst Disclosure Matter? A Real-Time Analysis (February 20, 2007). Available at SSRN: https://ssrn.com/abstract=891003 or http://dx.doi.org/10.2139/ssrn.891003

Joseph Engelberg (Contact Author)

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States

Caroline Sasseville

Kellogg School of Management - Department of Finance ( email )

Evanston, IL 60208
United States

Jared Williams

University of South Florida ( email )

Tampa, FL 33620
United States

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