Within the U.K.'s proactive financial-reporting-enforcement regime, we examine the effect of increased regulatory scrutiny on equity values. We find that a fourfold increase in the likelihood of regulator-initiated reviews of financial reports reduces equity values by 1.3% on average. Reductions...

This paper addresses regulatory concerns that large shareholders of credit rating agencies may influence the rating process. Unlike S&P which is a privately held division of McGraw Hill, Moody's is a public company listed on the NYSE. Over the period 2001 to 2010, Moody's had two shareholders,...