Changes in earnings announcement tone and insider sales

Research output: Contribution to journalArticlepeer-review

13 Scopus citations


The evidence from prior literature suggests that insider trading is related to firms' reported financial results and disclosure choices. I contribute to the literature by examining the association between narrative disclosure in earnings announcements and insider trading. Specifically, I hypothesize and find a positive association between changes in the optimistic tone of earnings announcements and CEOs' subsequent equity sales. In addition, I hypothesize and find that this relation is mitigated by the Sarbanes-Oxley Act and litigation risk. CEOs' financial gain from selling equity after more optimistic earnings announcements is small relative to their total compensation.

Original languageEnglish
Pages (from-to)276-282
Number of pages7
JournalAdvances in Accounting
Issue number2
StatePublished - 2014


  • Earnings announcements
  • Insider trading
  • Optimistic tone


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