Information Content of Insider Trades Before and After the Sarbanes-Oxley Act

Brochet studies the disclosure change created by Section 403 of the Sarbanes-Oxley Act. Before SOX, many insider transactions could be reported well after the trade; afterward, most Form 4s were due within two business days. This creates a natural before-and-after setting for asking whether timelier public disclosure changes return and volume around the filing itself.

Purchase filings show greater abnormal returns and trading volume after SOX in the paper’s sample. Sales filings show greater volume, but their return evidence is weaker and depends on controls for planned trades, reporting lag, litigation risk, and later news. The asymmetry is consistent with the broader literature: purchases have fewer routine liquidity explanations, while sales combine information with diversification, taxes, compensation, and prearranged plans.

Brochet’s horizon is crucial. The paper examines market reaction around the public filing, not a promise of multi-month outsider returns. Faster disclosure can make the announcement window more measurable without making a transaction a recommendation. Insider Atlas preserves accession number, filing URL, transaction date, and filing date so readers can see the public-data timeline. The site’s daily batch introduces an additional update lag that is documented separately. Comparisons with Jaffe, Seyhun, or Lakonishok and Lee must keep these different reporting regimes attached rather than treating half a century of records as one uniform information set.

Abstract excerpt

“This paper examines the information content of Form 4 filings under the more timely disclosure regime introduced by Section 403.”

Connections in Insider Atlas

The NTSK cluster links every underlying accession to EDGAR, while the NTSK company page shows the transaction history assembled from those filings.

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