Voluntary disclosures and insider transactions

Voluntary disclosures and insider transactions This paper investigates the association between voluntary disclosures and insider transactions (i.e., transactions by managers in their own firms’ shares). The findings suggest that managers do not make insider transactions to profit from news about their own firms just before it becomes publicly available. However, managers appear to employ other strategies for exploiting private information when making insider transactions. Managers cluster insider transactions after voluntary disclosures when doing so results in more favorable stock prices for them. Also, managers take advantage of knowledge about their own firms’ long-term prospects while utilizing voluntary disclosures to shield themselves against profiteering allegations. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Accounting and Economics Elsevier

Voluntary disclosures and insider transactions

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Publisher
Elsevier
Copyright
Copyright © 1999 Elsevier Science B.V.
ISSN
0165-4101
D.O.I.
10.1016/S0165-4101(99)00014-2
Publisher site
See Article on Publisher Site

Abstract

This paper investigates the association between voluntary disclosures and insider transactions (i.e., transactions by managers in their own firms’ shares). The findings suggest that managers do not make insider transactions to profit from news about their own firms just before it becomes publicly available. However, managers appear to employ other strategies for exploiting private information when making insider transactions. Managers cluster insider transactions after voluntary disclosures when doing so results in more favorable stock prices for them. Also, managers take advantage of knowledge about their own firms’ long-term prospects while utilizing voluntary disclosures to shield themselves against profiteering allegations.

Journal

Journal of Accounting and EconomicsElsevier

Published: Jul 1, 1999

References

  • Insiders and market efficiency
    Finnerty, J.
  • Insider trading, ownership structure, and the market assessment of corporate sell-offs
    Hirschey, M.; Zaima, J.

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