This dissertation consists of two essays. The first essay focuses on the ability of mandated SEC disclosures and voluntary corporate restrictions to restrain insiders from trading based on material, non-public information. We look at the combined effects of required Form-4 disclosures and the single most common corporate policy which restricts trading by insiders at all times except a short window starting three to 12 days after the earning announcement date which is called the white window. Results indicate that there is a strong selection bias by insider deciding which white window to trade in. Because of this selection bias there is not a significant difference between the average cumulative abnormal return of the black and white periods, but insiders gain much more cumulative abnormal return comparing the returns of the black period with the white periods that they do not trade in. We also compare the average cumulative abnormal return for the trades which are filed under a 10b5-1 plan versus non-plan trades. We find that in the black period, and in a short period right before earnings announcement date, the trades which are filed under a10b5-1 plan generate more cumulative abnormal return on average. The second essay studies disclosures by the banking industry about potential business risk factors leading into the financial crisis of 2007- 08. Such disclosures are mandated in Item 1A of the annual 10-K form filed with the SEC. The objective of this research is to evaluate the informativeness and timeliness of one specific component of annual reports (Form 10-K), namely Item 1A. We qualitatively examine this issue by checking the underlying tone of these disclosures. The results indicate that the tone of Item 1A has became much more negative from 2008 to 2009. We have also created a dictionary of financial crisis related words using LDA which is a generative statistical model to check the timing of appearance of those words in Item 1A. Overall, the results support the argument that the banking industry has failed to predict the financial crisis, and they have started noticing and disclosing risks related to the crisis only after it happened.
Subject (authority = RUETD)
Topic
Management
RelatedItem (type = host)
TitleInfo
Title
Rutgers University Electronic Theses and Dissertations
Identifier (type = RULIB)
ETD
Identifier
ETD_7803
PhysicalDescription
Form (authority = gmd)
electronic resource
InternetMediaType
application/pdf
InternetMediaType
text/xml
Extent
1 online resource (x, 89 p. : ill.)
Note (type = degree)
Ph.D.
Note (type = bibliography)
Includes bibliographical references
Subject (authority = ETD-LCSH)
Topic
Disclosure in accounting
Subject (authority = ETD-LCSH)
Topic
Financial statements
Note (type = statement of responsibility)
by Mehrzad Azmi Shabestari
RelatedItem (type = host)
TitleInfo
Title
Graduate School - Newark Electronic Theses and Dissertations
Identifier (type = local)
rucore10002600001
Location
PhysicalLocation (authority = marcorg); (displayLabel = Rutgers, The State University of New Jersey)
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