Stealth Trading and Trade Reporting by Corporate Insiders

Andre Betzer, Jasmin Gider, Daniel Metzger, Erik Theissen

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Regulations in the pre-Sarbanes–Oxley era allowed corporate insiders considerable flexibility in timing their trades and engaging in stealth trading, for example, by executing several trades and reporting them jointly after the last trade. We document that even these lax reporting requirements were frequently violated and stealth trading was common. Event study abnormal returns are larger after reports of stealth trades than after reports of otherwise similar non-stealth trades. Our results imply that delayed reporting impedes the adjustment of prices to the information revealed by insider trades. They lend strong support to the more stringent reporting requirements established by the Sarbanes–Oxley Act.
Original languageEnglish
Pages (from-to)865-905
JournalReview of Finance
Volume19
Issue number2
DOIs
Publication statusPublished - Mar 2015
Externally publishedYes

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Stealth trading
Insider
Event study
Abnormal returns

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Betzer, Andre ; Gider, Jasmin ; Metzger, Daniel ; Theissen, Erik. / Stealth Trading and Trade Reporting by Corporate Insiders. In: Review of Finance. 2015 ; Vol. 19, No. 2. pp. 865-905.
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Stealth Trading and Trade Reporting by Corporate Insiders. / Betzer, Andre; Gider, Jasmin; Metzger, Daniel; Theissen, Erik.

In: Review of Finance, Vol. 19, No. 2, 03.2015, p. 865-905.

Research output: Contribution to journalArticleScientificpeer-review

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