Market conditions, governance and the information content of insider trades

Harjeet S. Bhabra and Ashrafee T. Hossain

Review of Financial Economics, 2015, vol. 24, issue C, 1-11

Abstract: We examine the information content of Form-4 filings following extreme market downturns in the pre and post-Sarbanes–Oxley-Act (SOX) periods. We find that the announcement period abnormal returns under extreme market conditions are larger and this effect is stronger in the more tighter disclosure rules in the post-SOX period. Insider rank, corporate governance and proxies for information asymmetry are significantly related to the abnormal returns around the filing date. Overall, our results show that the more timely filing requirement introduced by SOX has been particularly beneficial for investors in firms with higher levels of information asymmetry, poor governance and during market downturns.

Keywords: Regulations; SOX; Insider trades; Information asymmetry; Corporate governance (search for similar items in EconPapers)
JEL-codes: G14 G30 G38 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:revfin:v:24:y:2015:i:c:p:1-11

DOI: 10.1016/j.rfe.2014.10.001

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