 Settlement agreement types of federal corporate prosecution in the U.S. and their impact on shareholder wealthChristian Flore, Sascha Kolaric and Dirk Schiereck Journal of Business Research, 2017, vol. 76, issue C, 145-158 Abstract: This paper analyzes the shareholder wealth effects of corporate prosecution settlements in the U.S. from 2001 to 2014. We focus on the relative monetary size of the settlement and on deferred prosecution and non-prosecution agreements in contrast to traditional plea agreements. The results show that the settlement of criminal prosecution leads to positive shareholder wealth effects, which may be due to the resolution of any remaining uncertainty with respect to the total settlement amount and lower than expected settlement costs. Stockholders generally view the announcement of plea agreements more positively than the announcement of deferred prosecution and non-prosecution agreements. The likelihood of a certain agreement type is strongly dependent on the crime committed. Moreover, larger firms with better board-related governance structures that have not been criminally prosecuted prior to the settlement are more likely to avoid a criminal conviction. Keywords: Corporate misconduct; Legal penalties; Settlements; Shareholder wealth; Event study (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:76:y:2017:i:c:p:145-158 DOI: 10.1016/j.jbusres.2017.03.015 Access Statistics for this article Journal of Business Research is currently edited by A. G. Woodside More articles in Journal of Business Research from Elsevier |
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