Inside the “black box” of Private In-house Meetings:Implications for Fair Disclosure and Insider Trading Regulation
While corporate private in-house meetings between investors and management are common across the world,there are generally no detailed reporting requirements for these meetings.The Shenzhen Stock Exchange in China is an exception and thus provides a unique opportunity to look inside the ”black box” to examine the structure and consequences of private in-house meetings.We develop a unique large-scale hand-collected dataset by accessing over 17,000 private meeting reports over 2012-2014 and use reported meeting details to examine the consequences of private in-house meetings.We find that,on average:(ⅰ)the stock market anticipates positive news in these private meetings as there is a significant stock price run-up starting about 30 days before the meeting date,(ⅱ)the market reacts strongly and positively around these meeting dates,and(ⅲ)the market reacts again around the subsequent public disclosure of the meeting notes.Further,we find that company insiders engage in significant trading activities around these meeting dates,selling over $12 billion USD of their shares – almost 62%of the total value of all insider trades for Shenzhen-listed firms in our sample period.Most importantly,it appears that company insiders are able to time their transactions: they tend to sell more shares before negative news disclosures but hold off selling when there is positive news to be disclosed in the meeting.Overall,our results suggest that firms disclose material non-public information during these private meetings,and that at least some meeting participants and company insiders trade on this information before it is publicly available.Finally,it appears that disclosure of private meeting details can be beneficial for market participants who are unable to attend such meetings.We discuss implications of these findings for disclosure requirements in the U.S.
disclosure private meetings fair disclosure inside information insider trading regulation information dissemination
Robert M.Bowen Shantanu Dutta Songlian Tang Pengcheng Zhu
School of Business,University of San Diego 5998 Alcala Park,San Diego,California,United States 92110 School of Management,University of Ottawa 55 Laurier East,Ottawa,Ontario,Canada K1N6N5 School of Business,East China University of Science and Technology 130 Meilong Rd.Shanghai City,P.R.
国内会议
上海
英文
50-118
2016-07-16（万方平台首次上网日期，不代表论文的发表时间）