New Study Released On The 8-K Trading Gap

On September 7, 2015, a new study on the "8-K trading gap" conducted by researchers at Harvard and Columbia law schools was released.  The "8-K trading gap" refers to the four business day period before SEC reporting companies must file a current report on Form 8-K, disclosing, among other things, significant corporate events, including material acquisitions and the execution of material contracts and other agreements.  During this period, material non-public information is known by a company's insiders (directors, officers and 10% owners) but not the larger investing public.  The study specifically examined a set of over 15,000 Form 8-K filings from 2004 to 2014 and how insiders traded their company's stock during the 8-K trading gap (the study though did not examine the trading patterns of 10% owners).  The study showed, among other things: