Data availability: All data are from public sources.
Enforcement and disclosure under regulation fair disclosure: an empirical analysis
Article first published online: 1 NOV 2011
© 2011 The Authors. Accounting and Finance © 2011 AFAANZ
Accounting & Finance
Volume 51, Issue 4, pages 947–983, December 2011
How to Cite
Griffin, P. A., Lont, D. H. and Segal, B. (2011), Enforcement and disclosure under regulation fair disclosure: an empirical analysis. Accounting & Finance, 51: 947–983. doi: 10.1111/j.1467-629X.2011.00446.x
We thank J. Birt, G. Boyle, J. Grundfest, B. Sidhu, T. Smith and an anonymous journal reviewer for their useful comments. Earlier versions have been presented at the Australian Graduate School of Management, the 10th Annual New Zealand Finance Colloquium, and the 2006 Accounting and Finance Association of Australia and New Zealand (AFAANZ) Annual Conference. All errors and omissions are ours.
- Issue published online: 1 NOV 2011
- Article first published online: 1 NOV 2011
- Received 20 May 2010; accepted 28 September 2010 by Robert Faff (Editor).
- Enforcement action;
- Event study;
- Late SEC filing;
- Regulation fair disclosure;
- Untimely fair disclosure
While Regulation Fair Disclosure (FD) was designed to benefit investors by curbing the selective disclosure of material non-public information to ‘covered’ investors, such as analysts and institutional investors, it can also impose costs. This paper finds that FD levies three kinds of enforcement and disclosure costs. First, investors cannot recover as part of an SEC enforcement action the gains to covered investors from their alleged use of the non-public information. Second, investors lose because the market responds negatively to an SEC enforcement announcement. Third, investors suffer because some companies post their FD filings well after the due date, without earlier public disclosure.