Download this Paper Open PDF in Browser

Jeopardy, Non-Public Information, and Insider Trading Around SEC 10-K and 10-Q Filings

51 Pages Posted: 20 Jun 2006  

Steven J. Huddart

Pennsylvania State University, University Park - Department of Accounting

Bin Ke

National University of Singapore

Charles Shi

NUS Business School, National University of Singapore

Multiple version iconThere are 2 versions of this paper

Abstract

Evidence contrasting U.S. insider trades in high- and low-jeopardy periods and across firms at high and low risk for 10b-5 litigation indicates that insiders condition their trades on foreknowledge of price-relevant public disclosures, but avoid profitable trades when the jeopardy associated with such trades is high, such as immediately before earnings announcements. Insiders avoid profitable trades before quarterly earnings are announced and sell (buy) after good (bad) news earnings announcements. Insiders trade most heavily after earnings announcements and profit from foreknowledge of price-relevant information in the forthcoming Form 10-K or 10-Q filing.

Keywords: accounting standards, government regulation, insider trading, litigation risk, stock-based compensation

JEL Classification: J33, K22, M12, M41

Suggested Citation

Huddart, Steven J. and Ke, Bin and Shi, Charles, Jeopardy, Non-Public Information, and Insider Trading Around SEC 10-K and 10-Q Filings. Journal of Accounting & Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=910056 or http://dx.doi.org/10.2139/ssrn.756124

Steven J. Huddart (Contact Author)

Pennsylvania State University, University Park - Department of Accounting ( email )

University Park, PA 16802-3603
United States
814-865-3271 (Phone)
814-863-8393 (Fax)

HOME PAGE: http://www.personal.psu.edu/sjh11

Bin Ke

National University of Singapore ( email )

Mochtar Riady Building, BIZ 1, #07-54
15 Kent Ridge Drive
Singapore, 119245
Singapore
+6566013133 (Phone)

Charles Shi

NUS Business School, National University of Singapore ( email )

15 Kent Ridge Dr
Singapore, 119245
Singapore
65-65161678 (Phone)

HOME PAGE: http://bschool.nus.edu/Accounting/FacultyStaff/Facultymembers.aspx

Paper statistics

Downloads
276
Rank
36,654
Abstract Views
2,393