The Effect of Audience Size on Managers’ Private Disclosures

Durney, Michael T.

doi:10.2139/ssrn.3469816

Cited by 4 publications

(2 citation statements)

References 90 publications

(197 reference statements)

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“…Brown et al (2015, 2016, 2019) report survey data documenting the significance of private meetings to investor relations officers, buy‐side investors, and sell‐side analysts. In addition, the average investor relations officer participates in more than 230 private meetings per year (Durney, 2021). D. H. Solomon and Soltes (2015) report that when investors meet privately with management, they make more informed trading decisions.…”

Section: Reg Fd and The Siebel Decisionmentioning

confidence: 99%

“…Corporations and corporate officials also disclose extensive information privately, however, through communications between officials and analysts in private meetings. Private meetings offer companies unique and expansive opportunities to communicate because their specific disclosures often are not directly observable and because only a select few market participants are invited (Bowen et al, 2020; Durney, 2021). A number of studies emphasize the importance of private meetings for conveying significant market‐sensitive information (see, e.g., D. H. Solomon & Soltes, 2015; Bengtzen, 2017; Bowen et al, 2020; Cai & Qi, 2021).…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Managers' private communications with analysts: The effect of SEC v. Siebel Systems, Inc.

Ali

Durney

Fisch

et al. 2023

Contemporary Accting Res

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In 2005, the SEC suffered a high‐profile loss in its first court case, SEC v. Siebel Systems, Inc., in an effort to enforce Regulation Fair Disclosure (Reg FD). We examine the impact of this loss on managers' selective disclosure to sell‐side analysts. We provide evidence that the informativeness of analyst reports increased after the Siebel decision, especially for observable instances of private meetings. This finding suggests that such selective disclosure increased significantly after the court's decision. Our results also suggest that the increased selective disclosure faded as the SEC resumed enforcement actions related to Reg FD in 2009. In exploratory analyses, we survey and interview law firm partners to investigate possible mechanisms for our results; their responses suggest that the Siebel outcome reduced manager concern about liability from selective disclosure. Collectively, our results highlight how the anticipated costs of regulatory enforcement affect private information flow from managers to analysts in particular.

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