|
|
|
|
||||
|
||||
The Consequences to Managers for Financial MisrepresentationJonathan M. KarpoffUniversity of Washington - Michael G. Foster School of Business D. Scott LeeUniversity of Nevada, Las Vegas - Lee Business School Gerald S. MartinAmerican University - Kogod School of Business Journal of Financial Economics, 88, May 2008, 193-215. Abstract: We track the fortunes of all 2,206 individuals identified as responsible parties for all 788 SEC and Department of Justice enforcement actions for financial misrepresentation from 1978 through September 30, 2006. Fully 93% lose their jobs by the end of the regulatory enforcement period. A majority explicitly are fired. The likelihood of ouster increases with the cost of the misconduct to shareholders and the quality of the firm's governance. Culpable managers also bear substantial financial losses through restrictions on their future employment, their shareholdings in the firm, and SEC fines. A sizeable minority (28%) face criminal charges and penalties, including jail sentences that average 4.3 years. These results indicate that the individual perpetrators of financial misconduct face significant disciplinary action.
Number of Pages in PDF File: 52 Keywords: Management turnover, CEO turnover, financial misrepresentation, fraud, penalties, Securities and Exchange Commission JEL Classification: G38, K22, K42, M41, M43, G34 Accepted Paper SeriesDate posted: September 11, 2007 ; Last revised: September 18, 2012Suggested CitationContact Information
|
|
|||||||||||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo4 in 0.782 seconds
