Jeopardy, non-public information, and insider trading around SEC 10-K and 10-Q filings
Steven Huddart (),
Bin Ke and
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Charles Shi: University of California, Irvine
Law and Economics from University Library of Munich, Germany
Evidence contrasting insider trades in the U.S. between high- and low- jeopardy periods and across firms at high and low risk for 10b-5 litigation indicates insiders condition their trades on foreknowledge of price-relevant public disclosures, but avoid profitable trades when jeopardy due to trade is high. Insiders avoid profitable trades before quarterly earnings are announced. Subsequent trades reflect foreknowledge of the forthcoming Form 10-K or 10-Q filing, which contains additional price-relevant information. Insiders appear to profit passively from earnings announcement and actively from foreknowledge of 10-K and 10-Q filings.
Keywords: accounting standards; government regulation; insider trading; litigation risk; stock-based compensation (search for similar items in EconPapers)
JEL-codes: K22 J33 M12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc and nep-law
Date: 2005-02-07, Revised 2005-07-03
Note: Type of Document - pdf; pages: 50
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Journal Article: Jeopardy, non-public information, and insider trading around SEC 10-K and 10-Q filings (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwple:0502001
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