Download or read book Management Earnings Forecast Bias and Insider Trading written by Afshad J. Irani and published by . This book was released on 2001 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the association between bias in earnings forecasts released by managers of financially distressed firms and subsequent insider trading. Prior studies have documented optimism in such forecasts. Given this finding, this study investigates whether this optimism is systematically related to opportunistic management behavior or a sincere belief (by management) that their firm's financial situation is going to get better. Abnormal insider trading in the post management forecast period is examined to test these alternative explanations. The findings for the full sample are consistent with the opportunistic view, however the trading activity of non-managerial insiders seems to be the primary driver.