Jeopardy, non-public information, and insider trading around SEC 10-K and 10-Q filings

Steven Huddart; Bin Ke; Charles Shi

doi:10.1016/j.jacceco.2006.06.003

Jeopardy, non-public information, and insider trading around SEC 10-K and 10-Q filings

Steven Huddart, Bin Ke, Charles Shi

Accounting

Research output: Contribution to journal › Article › peer-review

136 Scopus citations

Abstract

Evidence contrasting U.S. insider trades in high- and low-jeopardy periods and across firms at high and low risk for 10b-5 litigation indicates that insiders condition their trades on foreknowledge of price-relevant public disclosures, but avoid profitable trades when the jeopardy associated with such trades is high, such as immediately before earnings announcements. Insiders avoid profitable trades before quarterly earnings are announced and sell (buy) after good (bad) news earnings announcements. Insiders trade most heavily after earnings announcements and profit from foreknowledge of price-relevant information in the forthcoming Form 10-K or 10-Q filing.

Original language	English (US)
Pages (from-to)	3-36
Number of pages	34
Journal	Journal of Accounting and Economics
Volume	43
Issue number	1
DOIs	https://doi.org/10.1016/j.jacceco.2006.06.003
State	Published - Mar 2007

All Science Journal Classification (ASJC) codes

Accounting
Finance
Economics and Econometrics

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10.1016/j.jacceco.2006.06.003

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title = "Jeopardy, non-public information, and insider trading around SEC 10-K and 10-Q filings",

abstract = "Evidence contrasting U.S. insider trades in high- and low-jeopardy periods and across firms at high and low risk for 10b-5 litigation indicates that insiders condition their trades on foreknowledge of price-relevant public disclosures, but avoid profitable trades when the jeopardy associated with such trades is high, such as immediately before earnings announcements. Insiders avoid profitable trades before quarterly earnings are announced and sell (buy) after good (bad) news earnings announcements. Insiders trade most heavily after earnings announcements and profit from foreknowledge of price-relevant information in the forthcoming Form 10-K or 10-Q filing.",

author = "Steven Huddart and Bin Ke and Charles Shi",

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Jeopardy, non-public information, and insider trading around SEC 10-K and 10-Q filings

Abstract

All Science Journal Classification (ASJC) codes

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