Sharad C. Asthana
Temple University
Steven Balsam
Temple University
Srinivasan Sankaraguruswamy
Georgetown University
Abstract: The SEC requires public companies disclose financial and other information to provide a common pool of information for all investors. To increase the efficiency and fairness of the securities market the SEC recently required that all publicly traded companies file on the Internet via EDGAR. In this paper we examine the effect of the filing of form 10-K on EDGAR for small versus large traders.
We begin by showing that the filing of form 10-K on EDGAR results in significant increases in trading volume around the filing date for small but not for large traders. However increases in trading volume may not necessarily be beneficial, as smaller less informed traders are expected to lose when trading with larger better informed traders. We thus examine whether trading patterns reflect information available in the 10-K differently in the pre and post EDGAR period. Our results indicate that the trading patterns of small traders are more likely to reflect the information disclosed in the 10-K in the post EDGAR time period.
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