Do companies redact material information from confidential SEC filings?

U.S. public companies can redact information from required material contracts disclosures whenmanagement asserts that the information is immaterial and would cause competitive harm ifpublicly disclosed (i.e., it is proprietary). This study examines whether managers use this channelto withhold material information from investors. We find that firms' stock price discovery processis significantly slower and insider trading is significantly greater after companies file redactedcontracts compared with non-redacted contracts. Using data obtained under the Freedom ofInformation Act, we find that redacted material contracts withhold both quantitative and qualitativeinformation and redacted information is predictably associated with insider trading. These findingssuggest that at least some information redacted in material contracts is material to investors