What Are We Meeting For? The Consequences of Private Meetings with Investors

Regulation Fair Disclosure was passed in 2000 in response to the concern that certain investors were gaining selective access to privileged firm information. In spite of the passage of this regulation, some investors continue to meet privately with executives. Using a unique set of proprietary records of all one-on-one meetings between senior management and investors for a New York Stock Exchange-traded firm, we investigate the impact of private meetings on investor decisions. We find that when investors meet privately with management they make more informed trading decisions. This improvement in trading is concentrated in hedge funds, but is not present for investment advisors or pension funds. Overall, our results suggest that private meetings help a select group of investors make more informed trading decisions.