As you’re reading this Friday, I’m somewhere between the New York state line and Sturbridge, Mass. for an extra day of riding before the official Pan Mass Challenge starts on Saturday. A huge number of supporters of Compliance Building have donated in support of the ride, with 100% of that money going to the Dana-Farber Cancer Institute to help fight cancer.
I’m leaving this one last request to donate. If you donate by Sunday morning, the bonus is that I will get the notification about your donation while I’m on the bike ride, providing some extra motivation to my tired legs. Donate Here: http://profile.pmc.org/DC0176
Is Silence Golden? Negative Effects of Mandatory Disclosure by Sudarshan Jayaraman and Joanna S. Wu in the CLS Blue Sky Blog
Disclosure regulation is a cornerstone of modern securities markets. Its economic consequences have been extensively studied and heavily debated. A widely recognized benefit of mandatory disclosure is that it levels the playing field by publicly disclosing to everyone what is known only to sophisticated investors. This leveling reduces trading costs and consequently reduces the firm’s cost of capital.
In our recent paper, available here, we show that this reduced informational advantage of sophisticated investors is not unambiguously desirable. In particular, when sophisticated investors stop trading in a firm’s stock, there is a reduction in the ability of firm managers to glean decision-relevant information from the stock price. In other words, mandatory disclosure impedes the feedback effect of stock prices on managerial decisions, which in turn could harm investment efficiency. [More…]
Measuring the impact of Ethics and Compliance Programs by Thomas Fox
How does one measure the impact of a corporate compliance program? One of the key metrics of a corporate compliance program is to demonstrate the effectiveness of corporate compliance programs. Slowly but surely a body of work is being built up to demonstrate that companies which invest in greater compliance are more profitable. Recently the Ethics & Compliance Initiative (ECI) added to the growing body of work in the release of their report entitled “Measuring the Impact of Ethics and Compliance Programs” (the ECI Report). [More…]
Bitcoin believers are flocking to a sympathetic SEC commissioner’s Twitter account by John Detrixhe
Peirce’s social media exposure got a boost from a Reddit user who goes by lamb0x, who called for readers on the site to “show her some love from the Crypto Community.” She’s not the first buttoned-down American official to win Twittersphere adoration—the chairman of the Commodity Futures Trading Commission, J. Christopher Giancarlo, had his turn in February after he gave senators an unexpected education on crypto slang during a hearing. [More…]
With Clock Ticking Faster on Its Cases, the S.E.C. Faces a Quandary by Peter Henning
At issue is the court’s ruling a year ago in Kokesh v. Securities and Exchange Commission. The decision imposed a five-year window on the agency to seek repayment of any ill-gotten gains. Already, the decision has resulted in the dismissal of an overseas bribery case because the S.E.C. took too long to file the charges and has spurred a lawsuit demanding that the agency repay billions of dollars it has recovered in other cases.
The challenge for the S.E.C. will be whether it can adjust to the restrictions without their hindering its enforcement. If the agency can’t, it will have to persuade Congress to give it more time to pursue charges when the underlying misconduct might not come to light until years later. [More…]