The Freedom of Information Act and the Race Toward Information Acquisition

• 成果类型: Article
• 署名作者: Gargano, Antonio; Rossi, Alberto G.; Wermers, Russ
• 署名单位: University of Melbourne; University System of Maryland; University of Maryland College Park
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhw035
• 发表日期: 2017
• 页码: 2179
• 关键词: PORTFOLIO HOLDINGS; earnings announcements; public information; social value; FUNDS TIME; MARKET; preferences; disclosure; EFFICIENCY; investors

摘要

We document a little-known source of information exploited by sophisticated institutional investors: the Freedom of Information Act (FOIA), a law that allows for the disclosure of previously unreleased information by the U.S. Government. Through FOIA requests, we identify several sophisticated institutional investors, chiefly hedge funds, that request information from the FDA. We explore the type of information commonly requested by funds and the types of firms that are targets of FDA-FOIA requests and show that FOIA requests allow these investors to generate abnormal returns. Thus, we illustrate a detailed mechanism through which costly information becomes incorporated into market prices.