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Strategic trading and trade reporting by corporate insiders

Author

Listed:
  • Betzer, André
  • Gider, Jasmin
  • Metzger, Daniel
  • Theissen, Erik

Abstract

Regulations in the pre-Sarbanes–Oxley era allowed corporate insiders considerable flexibility in strategically timing their trades and SEC filings, e.g., by executing several trades and reporting them jointly after the last trade. We document that even these lax reporting requirements were frequently violated and that strategic timing of trades and reports was common. Event study abnormal returns are larger after reports of strategic trades than after reports of otherwise similar nonstrategic trades. Our results imply that delayed reporting impedes the adjustment of prices to the information revealed by insider trades. They lend strong support to the more stringent reporting requirements established by the Sarbanes–Oxley Act.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Betzer, André & Gider, Jasmin & Metzger, Daniel & Theissen, Erik, 2009. "Strategic trading and trade reporting by corporate insiders," CFR Working Papers 09-15, University of Cologne, Centre for Financial Research (CFR).
    • Handle: RePEc:zbw:cfrwps:0915
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    Cited by:

    1. André Betzer & Erik Theissen, 2010. "Sooner or Later: An Analysis of the Delays in Insider Trading Reporting," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 37(1‐2), pages 130-147, January.
    2. André Betzer & Erik Theissen, 2010. "Sooner or Later: An Analysis of the Delays in Insider Trading Reporting," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 37(1‐2), pages 130-147, January.

    More about this item

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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