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Executives across the financial sector are sitting on their hands when it comes to buying their own companies’ shares, and the timing has caught Wall Street’s attention. A new report from VerityData found that just 298 unique financial-sector insiders bought shares of their own companies during the July-to-September quarter — the lowest count in the firm’s records, which stretch back to 2004.
The pullback shows up starkly in the sector’s seller-to-buyer ratio, which climbed to 2.10 times its long-term average. That’s a notably wider gap than other major sectors are showing: Energy sits at 1.30 times its average, and Information Technology at 1.24 times. In plain terms, far more financial executives are selling shares than buying them relative to the sector’s own history, and the imbalance is more pronounced in finance than almost anywhere else in the market right now.
Harvard Law School professor Jesse Fried, who studies insider trading patterns, called the drop-off a meaningful signal rather than noise. Executive stock purchases have historically tended to predict market-beating returns for their companies, Fried said, which is part of why a pullback in buying — rather than just an uptick in selling — tends to register as a bearish signal for a sector.
The caution comes just as the biggest US banks prepare to report third-quarter results. JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo are set to report on October 13, with Morgan Stanley and Bank of America following on October 14. Analysts are broadly expecting strong numbers: earnings at the largest lenders are projected to rise as much as 20% year-over-year, driven by a sharp pickup in investment banking and trading revenue, with no signs yet of credit quality deteriorating.
That contrast — strong expected headline numbers against the weakest insider buying in over two decades — is exactly what’s drawing scrutiny. Insiders typically have the clearest view of their own institution’s near-term prospects, and when that group collectively steps back from buying even as consensus estimates point higher, it raises the question of whether executives see risks in the picture that the earnings forecasts don’t yet capture.
