Delays in Trade Reporting By Corporate Insiders

26 Pages Posted: 6 Mar 2007 Last revised: 1 Mar 2008

See all articles by Erik Theissen

Erik Theissen

University of Mannheim - Finance Area

André Betzer

University of Wuppertal - Schumpeter School of Business and Economics

Date Written: February 2008

Abstract

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 immediate disclosure of insider trades.

Keywords: Insider trading, directors' dealings, accounting standards

JEL Classification: G14, G30, G32

Suggested Citation

Theissen, Erik and Betzer, André, Delays in Trade Reporting By Corporate Insiders (February 2008). Available at SSRN: https://ssrn.com/abstract=966339 or http://dx.doi.org/10.2139/ssrn.966339

Erik Theissen

University of Mannheim - Finance Area ( email )

Mannheim, 68131
Germany

André Betzer (Contact Author)

University of Wuppertal - Schumpeter School of Business and Economics ( email )

Gaußstraße 20
Wuppertal
Germany

HOME PAGE: http://finance.uni-wuppertal.de/index.php?id=1153

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
311
Abstract Views
2,197
Rank
177,973
PlumX Metrics