June 5, 2018

‘Big Brother’ is Watching You (Reading That Proxy)

Recently, John blogged about a Bloomberg piece that covered a study that uses Edgar’s logs – which are publicly available! – to track which SEC filings are being read by hedge funds. The upshot is that you can then infer whether a big name investor was looking into a particular company.

There also is this study that tracks whether mutual funds or proxy advisors are reading your proxy. Here’s an excerpt:

For 97 large mutual fund families and 3,706 companies over seven years, we can determine the precise times when each investor accessed each SEC filing for each company. In addition, for the three most recent calendar years within our sample, we also observe the number of times the largest proxy advisory service company, Institutional Shareholder Services (ISS), accessed each company filing.

We build our dataset using the publicly provided server log files from EDGAR. These files include partially masked internet protocol (IP) addresses, which do not reveal the full identity of the user but which are sufficiently detailed to enable a mapping to the IP address blocks held by institutional investors. Several contemporaneous papers similarly rely on this approach, including for example Chen, Cohen, Gurun, Lou, and Malloy (2017) to study investment decisions; Crane, Crotty and Umar (2018) to study hedge funds; Bozanic, Hoopes, Thornock, and Williams (2017) to study the IRS; and Gibbons, Iliev, and Kalodimos (2018) to study sell-side analysis. However, we are the first to use these data to study the governance-related fundamental research performed by key investors.

The problem is that this approach of using Edgar logs is quite limited. Folks might be accessing SEC filings posted directly on a company’s IR web page. Or in the case of proxies, posted directly on Broadridge’s platform. And of course, folks might be reading proxies in paper. If I was an institutional investor, I would still be asking for paper as that seems like a far easier way to actually read a proxy…

Corp Fin Hires an “Digital Assets & Innovation” Associate Director

As noted in this press release, Corp Fin has hired Valerie Szczepanik as an Associate Director & Senior Advisor for “Digital Assets & Innovation.” Valerie will coordinate efforts across all SEC offices regarding the application of the securities laws to emerging digital asset technologies & innovations, including ICOs and cryptocurrencies. She was hired away from the SEC’s Enforcement Division where she most recently served as an Assistant Director in their Cyber Unit…

Our “Section 16 Forums”: Only a Few Weeks Away!

In response to those doing Section 16 work who have told us that they want to network with those similarly-situated, we are holding a pair of “Section 16 Forums” in June – one on each coast. Hosted by Alan Dye, these are one-day events for all Section 16 practitioners – not just beginners.

The pair of “Section 16 Forums” are:

Washington DC on Tuesday, June 19th
San Francisco on Tuesday, June 26th

You can “register now.” The cost is only $295.

Broc Romanek