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Article
Use and Abuse of Privileged Information in Italian Listed Companies
Author(s)
Annalisa Baldissera
Full-Text PDF XML 389 Views
DOI:10.17265/1537-1506/2019.01.002
Affiliation(s)
University of Brescia, Brescia, Italy
ABSTRACT
Privileged information has
significant importance to listed companies, given both the extent of the
markets in which it is used and the relevant effects that it can produce on the
prices of financial instruments. The term “privileged information” means information
that has not yet been made known to the public, which, if disclosed, is able to
affect significantly the prices of the securities of listed issuers. This article aims to prove that in many cases, the effects of privileged information can be adequately
represented in financial statements, despite their “confidential” nature. For this purpose, this research proposes the existence of a relationship—which
can be virtuous or vicious—between financial statements and privileged
information. In order to demonstate this thesis,
the author carried out an empirical survey concerning both the economic and the
legal sector. For the first one, the research considered the price-sensitive
information published by companies listed on the Italian Stock Exchange during the first half of 2018, and the result shows
that a lot of privileged information is able to generate accounting effects;
for the second one, the empirical survey analyzed some significant judgments
passed by the Italian Court of Cassation in the 2000s which confirm the
companies’ violation of the duty to present privileged information in financial
statements.
KEYWORDS
privileged information, financial statements, listed companies
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