Tag Archives: SEC

Does the Financial Experience of SEC Regional Directors Impact SEC Investigations? 

By | July 4, 2023
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The Securities and Exchange Commission (SEC) is the primary securities regulator for U.S. public companies, so its oversight effectiveness is critical for well-functioning capital markets. However, the regulator’s Division of Enforcement, which handles the investigation and prosecution of possible securities violations, has frequently been criticized and characterized as ineffective by the media, congressional members, and… Read More »

The Importance of Regulatory Shifts in 8-K Disclosures on Corporate Innovation 

By | February 28, 2023
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Technological innovation is crucial to a firm’s sustainable competitiveness and a country’s long-term economic growth. Prior academic work identifies two properties of firm disclosures, although they may have opposing effects on innovation. In one direction, the completeness of disclosures is beneficial for innovation by making external capital providers more receptive to providing financing, reducing the… Read More »

Angels and Devils: The Early Crypto Entrepreneurs

By | January 18, 2023
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This post is a summary of a paper that was selected for inclusion at the inaugural Digital Assets at Duke Conference at Duke University on January 20 and 21.  The past year was not a good one for crypto, with Sam Bankman-Fried’s massive fraud through FTX/Alameda, Do Kwon’s failed algorithmic stablecoin experiment (Terra Luna), and… Read More »

Legal Liability of a 51%, Goldfinger Cryptocurrency Attack

By | December 28, 2022
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Introduction  With a market cap of over $1 trillion, cryptocurrencies have quickly gone from an obscure novelty to an alternative currency juggernaut. The recent collapse of FTX, related entities, and others in the crypto ecosystem has drawn heightened attention to this important technology. Cryptocurrencies are decentralized digital currencies; cryptocurrencies also rely on the blockchain, described… Read More »

The Cost of Equity: Evidence From Investment Banking Valuations 

By | December 14, 2022
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Cost of equity (COE) is one of the most important financial metrics firms and investors consider when evaluating potential investments. There is an enormous academic literature that either proposes measures of cost of equity or uses it to study asset prices or corporate decisions. Further, practitioners employ discount rates ubiquitously, including for discounted cash flow… Read More »

Clarification or Confusion: A Textual Analysis of ASC 842 Lease Transition Disclosures

By | September 5, 2022
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In our recent paper, we study the textual meaning of the financial statement transition disclosures in firms’ filings with the Securities and Exchange Commission (SEC) explaining the likely effects of the adoption of Accounting Standards Codification (ASC) 842 on leases. Under President Franklin Delano Roosevelt, Congress established that the SEC’s backbone be based on a sufficient… Read More »

EDGAR Implementation, Unionization, and Strategic Disclosure 

By | August 19, 2022
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Do companies adapt their financial disclosures in accordance with the ease by which their stakeholders can access this information? To facilitate submission and dissemination of corporate filings, the Securities and Exchange Commission (SEC) Release No. 33-6977 from February 1993 mandated all SEC-registered firms to electronically submit all regulatory filings to the Electronic Data Gathering, Analysis,… Read More »

Attorneys and Compliance Personnel Seeking to Avail Of SEC Whistleblower Awards: Proceed With Caution

By | August 17, 2022
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The U.S. Securities and Exchange Commission (SEC) operates an enormously successful whistleblower award program. In just ten years, it has paid out over $1.3 billion to individuals who have helped the SEC prosecute hundreds of securities violations. Most award recipients are regular employees who report their employer, but a small portion are compliance personnel. Compliance… Read More »

Changes in Risk Factor Disclosures and the Variance Risk Premium 

By | June 14, 2022
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Since 2005, the Securities and Exchange Commission (SEC) mandates that all publicly-traded firms inform investors about material risks that may impact future performance. These are referred to as risk factor disclosures, which are discussed within Item 1A of 10-K filings. These risk disclosures have been criticized as lengthy and boilerplate (IRRC 2016; SEC 2016); it… Read More »

Regulator’s Use of Corporate Monitors to Remediate Financial Misconduct 

By | June 8, 2022
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Regulators such as the Securities and Exchange Commission (SEC) and Department of Justice (DOJ) are allowed to seek any remedy that is necessary to protect investors following violations of securities law. One remedy increasingly being used is the requirement that violating firms hire a corporate monitor at their own expense, who is charged with supervising… Read More »