EVIDENCE OF SELLING BY MANAGERS AFTER SEASONED EQUITY OFFERING ANNOUNCEMENTS

This paper documents concentrated net selling by managers in the month immediately following the announcement of seasoned equity offerings, together with continued substantial net selling for several additional months. This suggests that insiders may delay a significant amount of trading to avoid legal and market penalties. Significant abnormal ins ider net selling is evident both before and after passage of the Insid er Trading Sanctions Act of 1984. We also find more post-announcement abnormal insider selling for growth firms than for mature firms, which is consistent with a greater degree of overpricing for growth firms t han mature firms.