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