The Impact Of Sec Litigation On Firm Value
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Author | : Yaz Gulnur Muradoglu |
Publisher | : |
Total Pages | : 33 |
Release | : 2008 |
Genre | : |
ISBN | : |
This paper examines the effect of the announcement of the Securities and Exchange Commission's (SEC) legal enforcement actions. The results indicate that SEC lawsuits have a negative effect on share price. This is no surprise, but the real interest lies in understanding what characteristics of the legal enforcement process have greatest effects on firm value. Findings indicate that firms which communicate with the market regarding their enforcement cases receive more favorable treatment than those that do not. The results also show that the markets are able to differentiate between minor and major violations, with fraud and insider trading cases returning greater negative results than procedural violations and improper accounting. Case outcomes also elicit differential reactions; pending and partially settled cases have larger short-term negative returns than cases with known outcomes of similar nature, perhaps due to high levels of uncertainty. The focus is on recent history in an attempt to reflect accurately the current market climate.
Author | : Marilyn F. Johnson |
Publisher | : |
Total Pages | : 44 |
Release | : 1998 |
Genre | : Financial disclosure |
ISBN | : |
Author | : Michael Taillard |
Publisher | : John Wiley & Sons |
Total Pages | : 371 |
Release | : 2012-12-26 |
Genre | : Business & Economics |
ISBN | : 1118412796 |
Score your highest in corporate finance The math, formulas, and problems associated with corporate finance can be daunting to the uninitiated. Corporate Finance For Dummies introduces you to the practices of determining an operating budget, calculating future cash flow, and scenario analysis in a friendly, un-intimidating way that makes comprehension easy. Corporate Finance For Dummies covers everything you'll encounter in a course on corporate finance, including accounting statements, cash flow, raising and managing capital, choosing investments; managing risk; determining dividends; mergers and acquisitions; and valuation. Serves as an excellent resource to supplement coursework related to corporate finance Gives you the tools and advice you need to understand corporate finance principles and strategies Provides information on the risks and rewards associated with corporate finance and lending With easy-to-understand explanations and examples, Corporate Finance For Dummies is a helpful study guide to accompany your coursework, explaining the tough stuff in a way you can understand.
Author | : Roger Nelson Silvers |
Publisher | : |
Total Pages | : 68 |
Release | : 2012 |
Genre | : Insider trading in securities |
ISBN | : |
This study provides a test of the market valuation impact of Securities and Exchange Commission (SEC) enforcement actions for foreign firms. I examine the SEC enforcement policy towards foreign firms under its jurisdiction. In contrast to Siegel (2005) who examines earlier years, I find that the SEC's current (post-2002) enforcement intensity is considerable and has increased dramatically by comparison. I construct a novel test using the burgeoning series SEC enforcement events as changes to the legal environment that circumvents the issues associated with firm-level exchange-listing events (e.g. self-selection and simultaneous changes to firm traits). The tests focus on stock returns of foreign firms not targeted by the SEC during event windows surrounding SEC announcements of enforcements against foreign firms. This isolates the effect of a changing enforcement environment. I find that when the SEC takes action against a foreign firm, non-target foreign firms experience positive stock returns. Returns are amplified for firms from weaker home legal environments, suggesting that the returns are due to a perceived increase in SEC scrutiny. Finally, consistent with the market adjusting to the new enforcement regime, the magnitude of non-target firm returns declines with each sequential SEC enforcement action. The overall results provide evidence that SEC oversight plays a significant role in increasing the value of foreign firms, which supports the legal bonding hypothesis discussed in prior literature.
Author | : Christopher Llewellyn Jones |
Publisher | : |
Total Pages | : 54 |
Release | : 1996 |
Genre | : Insider trading in securities |
ISBN | : |
Author | : American Bar Association. House of Delegates |
Publisher | : American Bar Association |
Total Pages | : 216 |
Release | : 2007 |
Genre | : Law |
ISBN | : 9781590318737 |
The Model Rules of Professional Conduct provides an up-to-date resource for information on legal ethics. Federal, state and local courts in all jurisdictions look to the Rules for guidance in solving lawyer malpractice cases, disciplinary actions, disqualification issues, sanctions questions and much more. In this volume, black-letter Rules of Professional Conduct are followed by numbered Comments that explain each Rule's purpose and provide suggestions for its practical application. The Rules will help you identify proper conduct in a variety of given situations, review those instances where discretionary action is possible, and define the nature of the relationship between you and your clients, colleagues and the courts.
Author | : Roger Silvers |
Publisher | : |
Total Pages | : |
Release | : 2016 |
Genre | : |
ISBN | : |
This study shows that the Securities and Exchange Commission's (SEC) enforcement intensity toward the foreign firms under its jurisdiction has increased dramatically over the past two decades. Because enforcement events signify an increased threat of future enforcement, I examine the stock returns of foreign firms not targeted by the SEC during windows around enforcement actions that target foreign firms. This design captures the net effects of public enforcement and helps to rule out omitted variables as alternative explanations, because other factors would have to align with enforcement events that do not occur in an obvious pattern (and are therefore unlikely to map onto other news). Non-target firms experience positive stock returns during the event windows, which is consistent with enforcement constraining the risks of expropriation. The cross-sectional pattern in returns reveals greater returns for firms from weak home legal environments. Finally, consistent with the market adjusting to a new enforcement regime, the magnitude of event returns declines over time. Overall, SEC enforcement is associated with increases in the value of foreign firms, supporting the premise of the legal bonding hypothesis.
Author | : Judson Caskey |
Publisher | : |
Total Pages | : |
Release | : 2014 |
Genre | : |
ISBN | : |
The price reactions to corrective disclosures often serve as a benchmark for settlements in securities class action lawsuits. When the firm bears litigation costs, this benchmark creates a feedback effect that exacerbates the price reaction to news that contradicts managers' earlier reports. Litigation insurance provides value in this setting by reducing the need for investors to price the effects of anticipated litigation. Insurance also affects how changes in the litigation environment impact the firm, with some changes having opposite effects on the frequency of lawsuits against uninsured and insured firms. The pricing behavior of rational investors eliminates the valuation impact of the portion of settlements paid to investors, similar to dividends. The valuation impact of litigation arises from transaction costs, such as attorney fees, that the firm can mitigate by constraining misreporting and by purchasing insurance.
Author | : United States. Securities and Exchange Commission |
Publisher | : |
Total Pages | : 868 |
Release | : 1962 |
Genre | : Securities |
ISBN | : |
Author | : |
Publisher | : |
Total Pages | : 83 |
Release | : 2007 |
Genre | : Corporations |
ISBN | : 9781846632563 |
Dividend policy continues to be among the premier unsolved puzzles in finance. A number of theories have been advanced to explain dividend policy. This e-book briefly reviews the principal theories of payout policy and dividend policy and summarizes the empirical evidence on these theories. Empirical evidence is equivocal and the search for new explanation for dividends continues.