Protecting wall street or main street: SEC monitoring and enforcement of retail-owned firms

Michael Iselin (), Bret Johnson, Jacob Ott and Jacob Raleigh
Additional contact information
Michael Iselin: University of Minnesota
Bret Johnson: George Mason University
Jacob Ott: London School of Economics and Political Science
Jacob Raleigh: Monash University

Review of Accounting Studies, 2024, vol. 29, issue 2, No 7, 1235-1275

Abstract: Abstract This study examines whether retail ownership of a firm is associated with the likelihood that the firm is subject to monitoring and enforcement by the two largest divisions of the SEC. Monitoring is a form of ex ante or preventative regulatory oversight, while enforcement is a form of ex post or punitive oversight. We find a negative association between retail ownership and SEC monitoring. In contrast, we find a positive association between retail ownership and SEC enforcement. These results suggest that the SEC is less likely to monitor firms with high retail ownership, potentially leaving current retail investors more vulnerable to unresolved financial reporting issues. Additionally, the SEC is more likely to issue enforcement actions against firms with high retail ownership, imposing costs on current retail investors when the firm is accused of egregious cases of perceived financial misreporting.

Keywords: Retail ownership; SEC monitoring; SEC enforcement (search for similar items in EconPapers)
JEL-codes: G18 M41 M48 (search for similar items in EconPapers)
Date: 2024
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11142-022-09742-9 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:reaccs:v:29:y:2024:i:2:d:10.1007_s11142-022-09742-9

Ordering information: This journal article can be ordered from
http://www.springer.com/accounting/journal/11142

DOI: 10.1007/s11142-022-09742-9

Access Statistics for this article

Review of Accounting Studies is currently edited by Paul Fischer

More articles in Review of Accounting Studies from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().