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Within what period must management and major stockholders disclose transactions such as sales of company stock?
AWithin one quarter of the transaction
BWithin ten days of the transaction
CWithin one month of the transaction
DWithin two days of the transaction
Answer & Solution
Correct answer: D. Within two days of the transaction
1. Sarbanes-Oxley strengthened the disclosure of insider transactions, meaning an employee dealing in stock on information the public does not have.
2. Management and major stockholders must disclose transactions such as sales of company stock within two days.
3. Companies must also disclose any significant change in operations or financial condition on a rapid and current basis.
4. A monthly or quarterly window would defeat the purpose, because the market would learn of insider dealing long after the fact.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.2 The Accounting Profession_
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