Does The Stock Market Punish Corporate Malfeasance? A Case Study of Citigroup

Bruce Mizrach and Susan Zhang Weerts ()
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Susan Zhang Weerts: Rutgers University

Departmental Working Papers from Rutgers University, Department of Economics

Abstract: This paper examines how well the market anticipates regulatory sanction. We look at key dates of SEC, NASD, FTC, Congressional and foreign investigations and their subsequent resolution. Our event study confirms that the settlements provide little new information to the market. In six major case groupings, we find highly accurate predictions from market capitalization changes of settlements and associated private litigation.

Keywords: SEC; subpoena; probe; settlement; event study (search for similar items in EconPapers)
JEL-codes: K22 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2006-01-09
New Economics Papers: this item is included in nep-cfn, nep-fmk and nep-law
References: View references in EconPapers View complete reference list from CitEc
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Published in Corporate Ownership and Control 4:3, 2006, 154-8.

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Persistent link: https://EconPapers.repec.org/RePEc:rut:rutres:200601

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