The Financial Services Institute of Australasia (Finsia)
Abstract
Given that disclosure is important for the efficient functioning of capital markets, this paper explores the impact of infringement of continuous disclosure by Australian listed firms. We observe a significantly negative market reaction for our sample firms around the day an infringement is announced. Our findings also provide partial evidence of an increase in spreads and a decrease in price informativeness following the announcement of a breach. Overall, our results indicate that the market considers the breach of continuous disclosure to be a relatively important incident
