This study examines whether Freedom of Information Act (FOIA) requests to the Securities and Exchange Commission convey value-relevant information about publicly traded firms and whether sophisticated investors trade on that information. Our empirical analysis reveals heterogeneous value relevance associated with different types of requests. Specifically, requests submitted by proxy agents to probe for ongoing investigations as well as anonymous requests are negatively correlated with future returns, while requests from institutional investors and intellectual property entities are associated with positive future returns. Our results also support the direct-trading hypothesis, showing institutional investors and short sellers trade on FOIA-obtained information. Our findings add to the information-acquisition literature by highlighting the heterogeneous value signals in FOIA requests, particularly the negative value signals.

Research has long recognized that institutional investors possess significant information processing advantages. Yet even these investors face limited‐attention constraints, implying that periods of distraction may attenuate their advantage. We examine the effects of a plausibly exogenous shock to institutional attention arising from the annual buy‐side‐focused Equity Research and Valuation (ERV) conference for Chartered Financial Analysts on institutions' information processing at earnings announcements. Validation tests using conference call data indicate that fewer buy‐side analysts are present on earnings calls during ERV conferences and that questions are shorter, consistent with the presence of substitute or backup analysts. In our main analyses, we find that buy‐side analyst inattention reduces information asymmetry among investors and improves liquidity at these earnings announcements, consistent with theory, and observe similar results for non–earnings announcement events. In additional tests, we document slower price formation, but also more profitable retail trading, during these periods. Collectively, we provide novel evidence on the market consequences of institutional inattention during key information events.