내부자거래와 경영자예측정보공시

In Korea, Regulation Fair Disclosure was adopted in 2002. It mandated that all publicly traded companies disclose material information to all investors at the same time. The regulation sought to stamp out selective disclosure, in which insiders received market moving information before other investors. Management forecasts are included in Regulation Fair Disclosure to let outside investors know future profits before they are realized and to reduce information asymmetry between managers and outside investors. A review is necessary to examine whether Regulation Fair Disclosure is implemented properly. Therefore, this study empirically examines the relation between management forecasts and insider trading. Specifically, we argue that managers exploit future information to conduct insider trading before disclosing forecasts. The results are summarized as follows:Management forecasts are often released after insider trading. It means that managers exploit information superiority. Specifically, managers release good news after insider buying and bad news after insider selling. These results confirm that managers optimistic on future profits buy shares before releasing management forecasts to maximize trading profits and that managers pessimistic on future profits sell shares before releasing management forecasts to avoid stock market losses. Our paper contributes to research on insider trading in that we find that managers exploit information superiority to get more trading profits before disclosing forecasts.