Does the stock market punish corporate malfeasance? A case study of Citigroup | Zendy

Bruce Mizrach | Zendy; Susan Weerts | Zendy

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Does the stock market punish corporate malfeasance? A case study of Citigroup

Author(s) -

Bruce Mizrach,

Susan Weerts

Publication year - 2006

Publication title -

corporate ownership and control

Language(s) - English

Resource type - Journals

eISSN - 1810-0368

pISSN - 1727-9232

DOI - 10.22495/cocv3i4p11

Subject(s) - human settlement , business , stock market , capitalization , event study , key (lock) , financial economics , economics , geography , computer security , computer science , philosophy , linguistics , context (archaeology) , archaeology

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.

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