Abstract

http://ssrn.com/abstract=2506418
 


 



Whistleblowers and Outcomes of Financial Misrepresentation Enforcement Actions


Andrew C. Call


Arizona State University (ASU) - School of Accountancy

Gerald S. Martin


American University - Kogod School of Business

Nathan Y. Sharp


Texas A&M University - Department of Accounting

Jaron H. Wilde


University of Iowa - Henry B. Tippie College of Business

May 1, 2016


Abstract:     
Whistleblowers are ostensibly a valuable resource to regulators investigating securities violations, but whether there is a link between whistleblower involvement and the outcomes of enforcement actions is unclear. Using a dataset of employee whistleblowing allegations obtained from the U.S. government and the universe of enforcement actions for financial misrepresentation, we find that whistleblower involvement is associated with significantly higher monetary penalties for targeted firms and employees, and with significantly longer prison sentences for culpable executives. We also find enforcement actions involving whistleblowers are associated with significantly longer regulatory proceedings. Our findings contribute empirical evidence on the role of whistleblowers in the enforcement process and inform managers and policymakers, and the regulators who utilize these programs in their enforcement efforts.

Number of Pages in PDF File: 55

Keywords: whistleblowers, enforcement actions, fraud, penalties, financial reporting, Securities and Exchange Commission

JEL Classification: G38, K22, K42, M41, M48


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Date posted: October 7, 2014 ; Last revised: May 25, 2016

Suggested Citation

Call, Andrew C. and Martin, Gerald S. and Sharp, Nathan Y. and Wilde, Jaron H., Whistleblowers and Outcomes of Financial Misrepresentation Enforcement Actions (May 1, 2016). Available at SSRN: http://ssrn.com/abstract=2506418 or http://dx.doi.org/10.2139/ssrn.2506418

Contact Information

Andrew C. Call
Arizona State University (ASU) - School of Accountancy ( email )
Tempe, AZ 85287
United States
Gerald S. Martin (Contact Author)
American University - Kogod School of Business ( email )
Kogod School of Business
4400 Massachusetts Ave., N.W.
Washington, DC 20016-8044
United States
202-885-3914 (Phone)
Nathan Y. Sharp
Texas A&M University - Department of Accounting ( email )
4353 TAMU
College Station, TX 77843-4353
United States
979-845-0338 (Phone)

Jaron H. Wilde
University of Iowa - Henry B. Tippie College of Business ( email )
Acquisitions
5020 Main Library
Iowa City, IA 52242-1000
United States
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