After all, an unannounced visit from these watchdogs often signals serious trouble.
New research around stock behavior led by professors from universities across the Midwest took a novel approach.
The academics used commercially available mobile phone location data to track devices spending significant time around SEC offices.
They then traced those devices traveling to corporate headquarters in the year before the Covid lockdowns.
The research also doesn’t explicitly point towards insider trading it just signals some eyebrow-raising correlations.
But the implications are curious.
Overall, insider selling actually dipped 16% in the two weeks surrounding a stealth SEC visit.
As for why the stocks dropped, the researchers offer a couple oftheories.
Alternatively, rumors of the agency’s presence could have leaked, spooking investors into selling.
As regulators tighten policies, this new study raises questions about whether companies can fully control insider trading risks.
Image credit:Santeri Liukkonen
