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- Title
The Effect of Mandatory Disclosure on Open- Market Stock Repurchases.
- Authors
Simkovic, Michael
- Abstract
Publicly traded companies distribute cash to shareholders either through dividends or through anonymous repurchases of the companies' own stock on the open market. Companies must announce a repurchase authorization but do not actually have to repurchase any stock, and until recently companies did not have to disclose whether or not they were in fact repurchasing any stock. Scholars and regulators noticed that companies frequently announced repurchases but then appeared not to complete them. They feared that such announcements might be used by insiders to exploit public investors. To reduce opportunities for exploitive behavior, the SEC required that companies disclose their repurchase activity in their quarterly filings beginning in January 2004. This Article tracks 365 repurchase programs announced in 2004 and finds that, since the SEC disclosure requirement went into effect, companies are more likely to complete their announced repurchases and do so within a shorter time period after the repurchase announcement.
- Publication
Berkeley Business Law Journal, 2009, Vol 6, Issue 1, p96
- ISSN
1548-7067
- Publication type
Article