The consequences to managers for financial misrepresentation

• 成果类型: Article
• 署名作者: Karpoff, Jonathan M.; Lee, D. Scott; Martin, Gerald S.
• 署名单位: University of Washington; University of Washington Seattle; Texas A&M University System; Texas A&M University College Station; Mays Business School; American University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2007.06.003
• 发表日期: 2008
• 页码: 193-215
• 关键词: Management turnover; financial misrepresentation; FRAUD; penalties; securities and exchange commission

摘要

We track the fortunes of all 2,206 individuals identified as responsible parties for all 788 Securities and Exchange Commission (SEC) and Department of Justice (DOJ) enforcement actions for financial misrepresentation from January 1, 1978 through September 30, 2006. Fully 93% lose their jobs by the end of the regulatory enforcement period. Most are explicitly 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. (C) 2008 Elsevier B.V. All rights reserved.