Form 4 Electronic Submissions and Thomson Reuters Insider Filing Data Feed: Discrepancies and Their Impact on Research

This paper examines discrepancies between the electronic Form 4 and Thomson Reuters' Insider Filing Data Feed. The analysis shows differences in a small number of trades. The transaction code is the item frequently found to differ. Results also show that Thomson Reuters fails to follow its data codification policies. Users of the Form 4 should expect discrepancies in trade and firm characteristics. Inferences about the market reaction to insider filings and trades, association between aggregate insider trading and market returns, and cross-sectional variation in profitability of insider transactions do not appear to be significantly affected by these discrepancies. Overall, the evidence suggests that discrepancies between the electronic Form 4 and Thomson Reuters' Insider Filing Data Feed do not materially impact research. The results are consistent with observations made by the SEC suggesting that electronic filings facilitate research and data analysis and that the need for information intermediaries could be eliminated.