Sooner or later: delays in trade reporting by corporate insiders

Until October 2004 corporate insiders in Germany were required to report trades in the shares of their firm 'without delay'. In practice substantial reporting delays were common. We show that the delays are systematically related to the characteristics of the firm. Delays are longer in widely-held firms and in firms using German accounting standards. This suggests that managers of these firms are less responsive to the informational requirements of the capital market. We further find that abnormal returns after the reporting date of an insider trade are independent of the reporting delay. This implies that prices are distorted in the period between the trading and the reporting date. This is a strong point in favor of regulation requiring and enforcing immediate disclosure of insider trades.

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Year of publication:	2008
Authors:	Betzer, André ; Theissen, Erik
Publisher:	Cologne : Centre for Financial Research
Subject:	Führungskräfte \| Insiderhandel \| Publizitätspflicht \| International Financial Reporting Standards \| Deutschland \| insider trading \| directors' dealings \| accounting standards

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Series:	CFR working paper ; 08-06
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	582123216 [GVK] hdl:10419/41378 [Handle] RePEc:zbw:cfrwps:0806 [RePEc]
Classification:	G14 - Information and Market Efficiency; Event Studies ; G30 - Corporate Finance and Governance. General ; G32 - Financing Policy; Capital and Ownership Structure
Source:	EconStor