Scandals
Working Paper
Who Falls Prey to the Wolf of Wall Street? Investor Participation in Market Manipulation
Manipulative communications touting stocks are common in capital markets around the world. Although the price distortions created by so-called “pump-and-dump” schemes are well known, little is known about the investors in these frauds. By...Read more
Legal Personhood and Liability for Flawed Corporate Cultures
A number of recent corporate law scandals (including the Wells Fargo fraudulent accounts scandal, the Volkswagen emissions scandal, sexual harassment claims at Fox News and CBS, and various banking scandals currently under investigation in a high...Read more
Governance of Financial Services Outsourcing: Managing Misconduct and Third-Party Risks
With financial institutions increasingly outsourcing their activities, they face a record number of fraud and misconduct cases arising from third-party services. We survey financial institutions to better understand which governance mechanisms...Read more
Corporate Scandals and Regulation
Are regulatory interventions delayed reactions to market failures or can regulators proactively pre-empt corporate misbehavior? From a public interest view, we would expect “effective” regulation to ex ante mitigate agency conflicts between...Read more
After Halliburton: Event Studies and Their Role in Federal Securities Fraud Litigation
Event studies have become increasingly important in securities fraud litigation after the Supreme Court?s decision in Halliburton II. Litigants have used event study methodology, which empirically analyzes the relationship between the disclosure...Read more
Liability for Transnational Securities Fraud, Quo Vadis?
This Chapter evaluates the state of affairs with regard to liability for transnational securities fraud in the post-Morrison era, to find that it is in a state of flux. Indeed, the U.S. Supreme Court?s decision in Morrison has relatively little...Read more
The Corporate Value of (Corrupt) Lobbying
Using an event study, we examine whether the stock market considers corporate lobbying to be a value-enhancing investment. On January 3, 2006, lobbyist Jack Abramoff pleaded guilty to bribing politicians, which generated intense scrutiny of...Read more
Putting Integrity into Finance: A Purely Positive Approach
The seemingly never ending scandals in the world of finance with their damaging effects on value and human welfare argue strongly for an addition to the current paradigm of financial economics. We summarize here our new theory of integrity that...Read more
Corporate Scandals and Household Stock Market Participation
We show that after the revelation of corporate fraud in a state, household stock market participation in that state decreases. Households decrease their holdings in fraudulent as well as non-fraudulent firms, even if they did not hold stocks in...Read more
