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Tuesday, August 01, 2006

Suits, Sarbanes linked to CEO stock sales -study

Chief executives are more likely to sell large chunks of their stock holdings when their companies disclose new litigation or a violation of Sarbanes-Oxley internal controls requirements, according to a study released on Monday.

The report by The Corporate Library, which examined 120 chief executives who sold more than a third of their company shares in 2005, showed 30 percent sold stock when their company was involved in some sort of litigation. Twenty-four percent of the chief executives sold stock when there was a Sarbanes-Oxley violation at their firm.

"This would indicate a CEO's general lack of confidence in the company's stock price and should be cause for concern for shareholders."

posted by Brian Moran @ 1:58 PM   0 comments


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