We examine how in-person and virtual interactions shape mutual fund investment decisions using a comprehensive dataset of corporate site visits. Before COVID-19, fund pairs jointly attending in-person visits trade more similarly (by 20% of a standard deviation) than matched controls. The effect holds for stocks unrelated to the hosting firm and appears in firm-level, industry, geographic, and asset allocation decisions; it is stronger among managers with prior familiarity, similar seniority, and mixed gender. Stocks purchased by jointly visiting funds earn higher subsequent returns, indicating that these exchanges convey valuable information. Exploiting the exogenous shift to virtual communication induced by COVID-19, we find that in-person visits remain associated with correlated trading during the pandemic, whereas virtual visits have substantially weaker effects. A survey of fund managers confirms that site visits prompt information exchange, follow-up research, and portfolio adjustments. In-person interactions appear central to information acquisition; and virtual interactions do not easily replicate this function.

The paper examines the impact of executive compensation on private securities litigation. We find that incentive pay in the form of options increases the probability of securities class action litigation, holding constant a wide range of firm characteristics. We further document that there is abnormal upward earnings manipulation during litigation class periods and that insiders exercise more options and sell more shares during class periods, but that this activity is largely driven by pre-existing option holdings of the managers. Our results suggest that option-based compensation may have the unintended side effect of giving executives an incentive to focus excessively on the short term share price.

We investigate the relationship between investor attention and financial market anomalies. We find that anomaly returns tend to be higher following high-attention days. The result is robust after controlling for the effect of news and in a natural experiment setting in which a stock market regulation and rounding errors generate exogenous variations in attention. An analysis of order imbalances suggests that large traders trade on anomaly signals more aggressively upon observing higher attention. We discuss the extent to which the findings are driven by inattention-driven underreaction, bias amplification, or coordinated arbitrage mechanisms, thereby providing insight into the understanding of anomalies.