Disclosure Speed: Evidence from Nonpublic SEC Investigations

Abstract

We examine cross-sectional variation in how quickly managers disclose private information. We use novel data on SEC investigations that allow us to measure a shock to managers' private information sets and the time lag until subsequent disclosures. We measure the associations between 1) the time to disclose and 2) auditor quality, shareholder monitoring, analyst coverage, corporate governance, CEO compensation incentives, and ex ante litigation costs. We document that institutional ownership, changes in auditors, CEO power, and CEO equity vega are associated with faster disclosure. We document that analyst following is associated with slower disclosure. Our findings generate insights on the relation between institutional and firm characteristics and the timely disclosure of private information.