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A Lobbying Approach to Evaluating the Whistleblower Provisions of the Dodd-Frank Reform Act of 2010

58 Pages Posted: 7 Sep 2011 Last revised: 12 Apr 2016

Vishal P. Baloria

Boston College

Carol A. Marquardt

City University of New York (CUNY) – Baruch College

Christine I. Wiedman

University of Waterloo

Date Written: June 23, 2015

Abstract

We evaluate the net costs and benefits of the whistleblower (WB) provisions adopted under the Dodd-Frank Reform Act of 2010 by examining investor responses to events related to the proposed regulations. We focus our main analysis on a sample of firms that lobbied against implementation of the WB provisions by submitting a comment letter to the SEC. Short-window excess stock returns around events related to implementation of the WB rules are significantly more positive for lobbying firms than for similar non-lobbying firms; this effect is also more pronounced for lobbying firms with weaker existing WB programs. We also find that the new WB regulation is value-increasing for the average U.S. firm. These results collectively suggest that investors expect the new WB provisions to provide net benefits by improving shareholder protection.

Keywords: Whistleblowing, Dodd-Frank, Lobbying, Code of Ethics, Regulation

JEL Classification: M41, M48

Suggested Citation

Baloria, Vishal P. and Marquardt, Carol A. and Wiedman, Christine I., A Lobbying Approach to Evaluating the Whistleblower Provisions of the Dodd-Frank Reform Act of 2010 (June 23, 2015). Available at SSRN: https://ssrn.com/abstract=1923310 or http://dx.doi.org/10.2139/ssrn.1923310

Vishal P. Baloria

Boston College ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

Carol Marquardt

City University of New York (CUNY) – Baruch College ( email )

One Bernard Baruch Way, Box B12-225
New York, NY 10010
United States
646-312-3241 (Phone)

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