
Insiders Beat Market Before Event Disclosure: Study - jessaustin
http://www.wsj.com/articles/insiders-beat-market-before-event-disclosure-study-1442280193
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jessaustin
For those who really want to dig in on this issue, the referenced paper is
"The 8-K Trading Gap" [0]. From the abstract:

 _When a significant event occurs at a publicly traded company, federal law
requires the firm to disclose this information to investors in a securities
filing known as a Form 8-K. But the firm need not disclose immediately;
instead, SEC rules give companies four business days after the event occurs
within which to file an 8-K. These rules thus create a period during which
market-moving information is known by those inside the firm but not most
public-company investors — a period we call the “8-K trading gap.” In this
Article, we study how corporate insiders trade their company’s stock during
the 8-K trading gap._

TL;DR: as anyone would expect, this is another way that executives make lots
of money. In this case, 35 basis points over a period of less than four days.

I wonder whether it's significant that this work was done by law professors
rather than by economists or B-school profs?

[0]
[http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2657877](http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2657877)

