2004/06/01 by Venkat R. Eleswarapu, Venkat Eleswarapu, Rex Thompson +1 · 285 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Accounting #Auditing, Earnings Management, Governance #Business #Commission #Corporate Finance and Governance #Earnings #Economics #Finance #Financial Markets and Investment Strategies #Information asymmetry #Monetary economics #Volatility (finance) #Voluntary disclosure
paper · doi:10.1017/s0022109000003045
published in Journal of Financial and Quantitative Analysis 39(2), 209-225 (Cambridge University Press)
openalex publication_date 2004/06/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01
Abstract In October 2000, the Securities and Exchange Commission (SEC) passed Regulation Fair Disclosure (FD) in an effort to reduce selective disclosure of material information by firms to analysts and other investment professionals. We find that the information asymmetry reflected in trading costs at earnings announcements has declined after Regulation FD, with the decrease more pronounced for smaller and less liquid stocks. Return volatility around mandatory announcements is also lower but overall information flow is unchanged when mandatory and voluntary announcements are combined. Thus, the SEC appears to have diminished the advantage of informed investors, without increasing volatility.