Journal of Financial and Quantitative Analysis Vol. 58 No. 5 2023
Insider Filing Violations and Illegal Information Delay
Abstract
We document that a significant number of insiders violate the Securities and Exchange Commission (SEC) reporting requirements by filing open market transactions after the legally required deadline. Prior to the Sarbanes–Oxley Act (SOX), 29% of transactions fell outside the required reporting window. Following SOX, 8% are delinquent. Violations cluster in periods of high information asymmetry, incentivizing insiders to keep trades private and earn abnormal returns. Collectively, these findings suggest that a subgroup of insiders personally benefit from violating SEC disclosure requirements. Evidence also suggests that blockholders provide governance for violations. Guilty insiders experience a reduction in board seats and an increased likelihood of turnover.
- DOI
- 10.1017/s0022109022000953
- Volume
- 58
- Issue
- 5
- Pages
- 2262-2297
- Language
- en
- Sources
- openalex bibtex:phds-export.bib crossref