Timing is everything

A regression analysis of announcement of expected above-expected revenue and subsequent downward revisions, when matched to executive stock sales.  Shareholders, excluded from the inside information track, sue for insider trading and fraud.  Go figure.

“Executives Hit Stock-Sales Sweet Spot, Wall Street Journal, November 14, 2013 A1 http://on.wsj.com/HVe2yv

Internal communications warn about negative impact from loss of one customer’s business.  Four months later, company announces sales will exceed expectations, and then executive sells $3.3 million in stock.  Then analyst reports problems with orders by customer.  Months later, company announces declining customer demand and decreased sales.

Questions: (1) How do you handle internal communication of bad news? (2) How do you handle external communication of good/bad news? (3) How do you control and monitor executive sales and purchases of company stock? (4) As an employee, how would you describe the culture of compliance at this company?

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Filed under Business Case, Compliance, Content, Controls, Culture, Definition, Governance, Information, Internal controls, Investor relations, Legal, Ownership, Requirements, Risk, Value

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