ABSTRACT: Extant research on voluntary disclosure about future prospects has focused on two forward-looking disclosure mechanisms: management forecasts and conference calls. This study examines the accelerated filing of material contracts as another type of future-related disclosure that involves no forecasting. I find that firms are more likely to accelerate material contract filings when forward-looking disclosures could lack credibility or arouse litigation concerns. However, for proprietary cost considerations, firms delay contract filings when facing high (low) product market competition from incumbents (potential entrants). I also find that accelerated contract filing is incrementally associated with lower information asymmetry. Overall, while presenting a cost-benefit trade-off that is distinctly different from forward-looking disclosures, accelerated contract filing is an important alternative channel through which firms communicate future prospects to investors. Data Availability: The data used in this study are available from the public sources identified in the paper. Contact the author for any specific data requests.

This study examines changes in SEC enforcement and firm cooperation after the SEC introduced its new cooperation program in 2010. While previous research shows that the SEC penalized cooperative firms prior to 2010, our results suggest that after that year, it rewarded cooperation, especially good faith actions. We also find that after 2010, the SEC increased mentions of cooperation in public speeches and publicized more details about firm cooperative activities in AAERs. Finally, we find some evidence that misconduct firms increased good faith cooperation after the SEC revised its cooperation program in 2010. Our findings suggest that having a more explicit leniency program improves its effectiveness.

ABSTRACT: Using data from the EDGAR era, we find a significant market reaction surrounding quarterly periodic reports only when their filing coincides with the first public disclosure of earnings, although that for 10-K reports is not subsumed by earnings releases. However, after eliminating incidence of concurrent earnings releases, the 10-K market reaction is restricted to a quarter of the reports that are filed around calendar quarter-ends. The calendar quarter-end price and volume effects are unrelated to the filing of periodic reports and are not explained by self-selection. However, while the quarter-end volume reaction is indistinguishable between filers and non-filers, we find an incremental price reaction to 10-K filings at calendar quarter-ends in recent times. We provide evidence that the calendar-time effect is partially due to an intraindustry information transfer that is a function of the incidence of 10-K reports at quarter-ends. Finally, equity analyst reactions are muted around periodic filings, with no evidence that they contribute to quarter-end information transfer.

ABSTRACT We study firms’ decisions to withhold loan covenant details by focusing on a unique disclosure-related cost. Prior research documents the prevalence of tight initial covenants that are selectively relaxed in future renegotiations. This uncertainty in renegotiation outcomes can generate a disclosure-related cost because disclosing a snapshot of initial covenants with a high likelihood of violation could lead to harmful outsider reactions (e.g., trade credit cuts) to violations that may be eventually cured. We hypothesize and find that, when firms are likely to face tighter initial covenants and more renegotiations, they are more likely to withhold covenant details, particularly when under pressure from trade creditors. Our inference is robust to controlling for firms’ obligation to disclose (i.e., contract materiality) and future performance. Prior research has found that the precise covenant details of many loans are not publicly available. We are the first to offer a systematic explanation related to disclosure costs. JEL Classifications: M41; D82; G21; L14.

ABSTRACT: We examine the role of newswires in identifying and conveying market-moving information in periodic SEC reports to capital market participants. Using data on Dow Jones Newswires, we find that newswires are more likely to send alerts on firms that do not release preliminary earnings, have credit ratings, are included in major market indices, have litigation exposure, or report losses. Reflective of the market’s focus on certain key events, firms with a nonstandard audit opinion, in the process of delisting, reporting unusual accounting items, or raising equity capital also receive alerts. Moreover, not only do we find significant price and volume reactions to the alerts at the daily level, but also we document immediate intra-day market activity triggered by the alerts, whereas we detect no similar reaction for SEC filings that trigger the alerts. Additional analysis suggests that the intra-day reaction is not driven by noise trading.

ABSTRACT Analysts often update their recommendations following corporate news. Questions have been raised regarding analysts’ ability to generate new information beyond recent corporate events. Employing a comprehensive database on corporate news, we show that only a small minority, or 27.9%, of all recommendation revisions directionally confirm the information in the preceding corporate events and even these “confirming revisions” facilitate the information discovery of corporate events and thus cannot simply be dismissed as “piggybacking.” Our analysis further shows that analysts not only facilitate price discovery to corporate news through issuing trending revisions but also help reverse prevailing market sentiments following corporate news by issuing contrarian revisions. Our study is the first to investigate short‐window intraday market reactions to revisions issued after hours, which account for 70% of all recommendation revisions in our sample period. Analysts’ incentives to issue revisions after hours appear to reflect demands from large institutional clients, who dominate after‐hours trading. More importantly, we show that the after‐hours revisions are associated with significantly greater price reactions and different price reaction patterns than revisions issued during regular trading hours. Collectively, our evidence indicates that analysts are a significant source of new information beyond recent corporate news and they also help shape the market's assessment of corporate disclosures.

ABSTRACT This study examines the unintended effects of a pre-Reg FD practice that gave a broad group of sophisticated market participants 15-minute earlier access to all corporate press releases than the general public. We find that roughly one-eighth of the price discovery to earnings announcements issued during regular trading hours was due to privileged access to information in earnings press releases, with the 15-minute priority dissemination contributing to just over 50 percent of price discovery from all privileged access. In addition, we find that transient institutions benefited from priority dissemination, especially when the earnings contained good news. Finally, consistent with economic theory, we find that intraday bid-ask spreads decreased post-Reg FD for firms that had sufficient market liquidity to allow trading opportunities during the 15-minute window. Our study has implications for current discussions on whether preferential information distribution by firms and information intermediaries creates an uneven playing field among investors. Data Availability: The data used in this study are available from the public sources identified in the paper JEL Classifications: D82; G14; K22; M45.

ABSTRACT Ball and Brown (1968) introduce a method to measure accounting earnings’ contribution to price discovery toward the end-of-period price. Building on this method, we examine a comprehensive set of corporate disclosures and document a large gap in their contribution to annual price discovery between bad and good news years (40 percent versus over 60 percent), despite no such difference in stock return variance (partial R2). These patterns are consistent with managers proactively releasing good news to counteract negative news during bad news years. Our finding broadens the concept of news bundling from concurrent releases to intertemporal dynamics within an annual window. Voluntary press releases are a key driver of this disparity in price discovery, adding 3 percent in bad times while being the top contributor in good times (27 percent). Investor private information acquisition contributes to bridging the gap left by corporate disclosures in price discovery during bad news years. Data Availability: Data are available from public sources cited in the text. JEL Classifications: G10; G12; M41.