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https://openaccess.city.ac.uk/id/eprint/30049/1/Fich%2C%20Parrino%2C%20and%20Tran%20-%2031%20January%202023%20deposit.pdf
Accepted (AM)Open Access (License Unspecified), Open
Journal article
When and how are rule 10b5-1 plans used for insider stock sales?
Journal of financial economics, v 149(1), pp 1-26
Jul 2023
Abstract
SEC Rule10b5-1 plans are intended to limit the ability of insiders to trade opportunistically. We study insider stock sales by CEOs both under and outside of these plans. While both groups exhibit opportunism, this behavior is more limited in plan sales and non-plan sales in well-governed firms. Furthermore, opportunism in plan sales is greater for transactions representing a larger fraction of the CEO's firm-related wealth. CEOs can circumvent the intent of Rule 10b5-1 by exercising their discretion over financial reporting and real earnings management and appear to benefit from material nonpublic information by selectively cancelling plans or using limit orders.
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Details
- Title
- When and how are rule 10b5-1 plans used for insider stock sales?
- Creators
- Eliezer M. Fich - Drexel UniversityRobert Parrino - The University of Texas at AustinAnh L. Tran - Bayes Business School, City, University of London, 106 Bunhill Row, London EC1Y 8TZ, UK
- Publication Details
- Journal of financial economics, v 149(1), pp 1-26
- Publisher
- Elsevier
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000991223000001
- Scopus ID
- 2-s2.0-85153628023
- Other Identifier
- 991020542327404721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business, Finance
- Economics