Insider Trades and Private Information: The Special Case of Delayed-Disclosure Trades

Shijun Cheng · Venky Nagar · Madhav V. Rajan

90 citations0/0 files storedReview of Financial Studies

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Financial Markets and Investment Strategies Corporate Finance and Governance Auditing, Earnings Management, Governance

Abstract

In certain circumstances, insider trades such as private transactions between executives and their firms could be disclosed after the end of the firm's fiscal year, on a Form-5 filing. We find that insider sales disclosed in such a delayed manner for large firms are predictive of negative future returns (−6 to −8 percent), as well as lower future annual earnings relative to analyst forecasts. These results stand in contrast to existing findings on the uninformativeness of quickly disclosed open-market insider sales. The Sarbanes-Oxley Act curtailed the use of Form 5 under the presumption that managers used this vehicle opportunistically. Our systematic evidence supports this presumption.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 90 citations exist upstream.

References

1997A Survey of Corporate Governance 1980On the Impossibility of Informationally Efficient Markets 1980Economics and Consumer Behavior 2003Managing with Style: The Effect of Managers on Firm Policies 1980On the Impossibility of Informationally Efficient Markets 2005Understanding the process of economic change 2005Understanding the Process of Economic Change 1997A Survey of Corporate Governance

Cited by

2013The integration of sustainability into the theory and practice of finance: an overview of the state of the art and outline of future developments 2017The Persistence of Opportunistic Insider Trading 2014The Information Content of Realized Losses 2009Are corporate managers savvy about their stock price? Evidence from insider trading after earnings announcements 2010The informativeness and ability of independent multi-firm directors 2017Expertise Rents from Insider Trading for Financial Experts on Audit Committees

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.