Insider Filings Pour Into SEC After Quarantine

The U.S. Postal Service is belatedly delivering thousands of insider stock transaction reports to the Securities and Exchange Commission--paper filings delayed when anthrax contaminated Washington’s postal center three months ago.

The reports of executive stock trades from October through early December are just now arriving at the SEC, where they are studied by investors as a sign of how company insiders view the value of their own companies’ shares.

“You can truly see what people are doing with their own funds,” said Mark Buckingham, an analyst with Muzea Consulting, a firm that tracks insider data for institutional investors. “If you believe in your company and you are willing to put your money where your mouth is, that is a stronger testament than words.”

About 1 million letters and packages were quarantined when the Postal Service shut down Washington’s Brentwood mail-sorting facility on Oct. 21, after an envelope containing anthrax was delivered to the office of Senate Democratic Leader Tom Daschle. Two Brentwood postal workers died from inhalation anthrax in what authorities described as a probable terrorist attack.

The quarantine and an irradiation treatment applied to Brentwood letters created a backlog in paper filings going to the SEC and other U.S. government agencies.

Some filings reached the SEC, but many did not. Now, the SEC is dealing with a flood: In the first five business days of January, the agency made public more than 1,400 documents known as Form 144s that were originally mailed in October, November and early December.

Many of the documents had turned yellow and brittle because of the treatment to kill anthrax spores. Some of the filings crumbled in the hands of document researchers who sift through the reports to gather information for Wall Street brokerages and institutional investors.

SEC filings are required to be made by top executives who buy and sell shares in the companies that they run, as well as by large shareholders and people who receive stock through private transactions.

Insider reports are an exception to rules that require U.S. corporations to file their disclosure reports through the SEC’s electronic data gathering, analysis and retrieval (EDGAR) system. The agency has yet to require electronic filing by insiders because it believes that many lack the resources to use EDGAR.