Private Information Acquisition via FOIA Requests Made to the SEC

55 Pages Posted: 27 Apr 2020 Last revised: 12 May 2022

See all articles by Stephen Glaeser

Stephen Glaeser

University of North Carolina (UNC) at Chapel Hill - Accounting Area

Bryce Schonberger

University of Colorado at Boulder - Leeds School of Business

Charles E. Wasley

Simon School, University of Rochester

Jason J. Xiao

University of Rochester - Simon Business School

Date Written: May 11, 2022

Abstract

There is limited evidence about when, why, and which individuals incur costs to acquire non-public information about a firm, largely due to the difficulty of observing private information acquisition. To overcome this difficulty, we obtain data on Freedom of Information Act (FOIA) requests submitted to the Securities and Exchange Commission (SEC). We predict and find that perceived information asymmetry between managers and outsiders resulting from both proprietary and agency costs triggers FOIA search. We categorize organizations making FOIA requests using their business descriptions and find that many, including law and intellectual property firms, are not expressly interested in obtaining information for near-term equity trading. Instead, their search activity relates to determinants beyond financial characteristics, including patent litigation and executive turnover. Taken together, we provide evidence on private information search by a relatively unexamined set of organizations and shed new light on the function of the SEC’s Office of FOIA Services.

Keywords: Freedom of Information Act; information acquisition; information search; disclosure; agency costs; proprietary costs; competition; lawsuits

JEL Classification: D82, D83, M41

Suggested Citation

Glaeser, Stephen and Schonberger, Bryce and Wasley, Charles E. and Xiao, Jason J., Private Information Acquisition via FOIA Requests Made to the SEC (May 11, 2022). Available at SSRN: https://ssrn.com/abstract=3554850 or http://dx.doi.org/10.2139/ssrn.3554850

Stephen Glaeser

University of North Carolina (UNC) at Chapel Hill - Accounting Area ( email )

McColl Building
Chapel Hill, NC 27599
United States

Bryce Schonberger

University of Colorado at Boulder - Leeds School of Business ( email )

Boulder, CO 80309-0419
United States

Charles E. Wasley

Simon School, University of Rochester ( email )

Rochester, NY 14627
United States
585-275-3362 (Phone)
585-442-6323 (Fax)

Jason J. Xiao (Contact Author)

University of Rochester - Simon Business School ( email )

Rochester, NY 14627
United States

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