Unreadable Political Trades

Legislators can disclose their stock trading transactions through either typed electronic filings (machine-readable) or handwritten/hand-delivered and subsequently scanned filings (largely “unreadable”), in the latter of which the disclosed information is more difficult to identify, extract, and disseminate. Using a novel dataset of congressional trading from 2013 to 2022, we show that compared to trades reported in readable filings, trades from unreadable filings are more profitable, involve a larger number of stocks and greater trading volume, are more likely to be executed through a legislator’s spouse or children, and are filed less promptly. Prior to economically sizable legislative events, trades extracted from any two politicians’ unreadable filings exhibit significant similarity. Individuals connected through unreadable trades are more likely to co-sponsor a bill in the near future. Our findings highlight the role of strategic disclosure in legislative trades and identify political networks embedded in unreadable filings that remain undetectable through readable filings or other known political connections.