Exchanges and Their Investors: A New Look at Reporting Issues, Fraud, and Other Problems by Exchange
39 Pages Posted: 15 Jan 2012
Date Written: December 5, 2011
Statistics reporting litigated cases of fraud on an exchange-by-exchange basis are not readily available to investors. This paper introduces data from three countries with multiple exchanges with different listing standards – Canada, the United Kingdom and the United States – to show litigated cases of fraud significantly vary by country, and the different exchanges within the country. Comparisons are also made to Brazil, China and Germany to assess out-of-sample inferences. The data examined suggest there are significant differences in the nature of observed fraud across exchanges within the United States; by contrast, outside the United States there appears to be a comparative lack of enforcement. The data also suggest policy implications for the ways in which fraud ought to be reported to improve investor knowledge, market transparency and market quality.
Keywords: Corporate fraud; Exchange listing standards, Securities commissions, NYSE, NASDAQ, TSX, TSXV, LSE, AIM, Pinksheets
JEL Classification: G32, J33
Suggested Citation: Suggested Citation