SEC Enforcement: Does Forthright Disclosure and Cooperation Really Matter?
55 Pages Posted: 15 Jul 2010 Last revised: 29 Jun 2011
There are 2 versions of this paper
SEC Enforcement: Does Forthright Disclosure and Cooperation Really Matter?
SEC Enforcement: Does Forthright Disclosure and Cooperation Really Matter?
Date Written: June 28, 2011
Abstract
This study examines the conditions under which the Securities and Exchange Commission (SEC) exercises enforcement leniency following a restatement. I explore whether cooperation with SEC staff and forthright disclosure of a restatement (e.g., disclosures reported in a timely and visible manner) reduce the likelihood of an SEC sanction or SEC monetary penalties. After controlling for restatement severity, I find that cooperation increases the likelihood of being sanctioned, perhaps because it improves the SEC’s ability to build a successful case against the firm. However, cooperation and forthright disclosures are rewarded by the SEC through lower monetary penalties.
Keywords: SEC enforcement actions, accounting restatements, cooperation, voluntary disclosure, press release prominence, AAERs, investigations
JEL Classification: G18, G38, K42, M41
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Stealth Disclosure of Accounting Restatements
By Rebecca Files, Edward P. Swanson, ...
-
Stealth Disclosure of Accounting Restatements
By Rebecca Files, Edward P. Swanson, ...
-
By Linda A. Myers, Susan Scholz, ...
-
Analyst Following and Credit Ratings
By Mei Cheng and K.r. Subramanyam
-
Principles-Based Versus Rules-Based Standards and Earnings Management
-
SEC Enforcement: Does Forthright Disclosure and Cooperation Really Matter?
-
Financial Reporting Credibility after SOX: Evidence from Earnings Restatements
By Mark Hirschey, Kevin R. Smith, ...
-
Regulatory Oversight of Financial Reporting: Securities and Exchange Commission Comment Letters
By Rick Johnston and Reining Petacchi