We find that firms with CFOs who have extensive social connections within the finance industry hold less precautionary cash. CFO connections matter more than CEO connections, reflecting the preeminence of CFOs among C-level executives in cash management and negotiating access to corporate finance. Firms reduce the proportion of assets held in cash by seven percentage points in the two years following CFO turnover and the appointment of a CFO with finance industry connections. The stock market valuation of incremental cash holdings of firms with well-connected CFOs is lower than for other firms, consistent with investor recognition of CFO social capital as an alternative means to address constraints on external capital.

We investigate if prior professional legal education either restrains or increases the extent to which the insider trades of company executives and directors are informed. We show that executives and directors with legal expertise (lawyer-insiders) earn significantly lower abnormal returns than non-lawyer-insiders when they purchase their own company's shares. Purchases by lawyer-insiders are associated with lower future earnings surprises and firm profitability than those made by non-lawyer-insiders, and are more muted following months with high levels of SEC enforcement activity. Our results suggest that insiders with legal education may be more conservative in exploiting private information when making insider trades.