Stock Prices and the Secondary Dissemination of Information: The Wall Street Journal's “Insider Trading Spotlight”Column


  • We thank an anonymous referee and seminar participants at the University of Hawaii and the 1995 Financial Management Association meetings for helpful comments. We also thank Beth Baugh for editorial assistance.

*College of Business Administration, University of Hawaii, Honolulu, HI 96822, Phone: (808) 956–7493, Fax: (808) 956–9887, E-mail:


In this paper we test whether a secondary dissemination of information affects stock prices. We examine stock price reactions to the publication of the “Insider Trading Spotlight”(ITS) column in the Wall Street Journal (WSJ). Since insider trades reported in the ITS column are initially disclosed to the public when insiders’ reports are filed with the Securities and Exchange Commission (SEC), the information contained in the WSJ is a secondary dissemination. Around the WSJ publication day, we find significant abnormal stock performance accompanied by a significant increase in trading volume. Our evidence suggests that a secondary dissemination of information can affect stock prices if the initial public disclosure attracts only limited attention by the market. In addition, we document how insider trading information is conveyed to the market.