We propose and find that enhanced regulatory transparency facilitates alignment between private and public enforcement. Utilizing the SEC's 2004 decision to publicly disclose its comment letters, we explore the actions of a public enforcer (the SEC) and a private enforcer (shareholder...

We exploit the landmark U.S. Supreme Court decision of Kokesh v. SEC [2017] as a unique identification strategy to investigate the value of securities law enforcement. The Kokesh decision was an unanticipated legal change that limits the SEC's ability to impose disgorgement—its most potent...

Most legal and economics scholars recognize both that the government needs information about taxpayers’ transactions in order to determine whether their reporting is honest, and that third-party reporting helps the government obtain that information. Given governments’ reliance on tax funds,...

This paper studies the effect of anti-bribery enforcement on the accrual quality of investigated firms and their peers. We analyze a hand-collected sample of 241 bribery cases investigated under the US Foreign Corruption Practices Act (FCPA) over the period 1978-2015. Exploiting the disclosure...

Harassment bribes - payments people give in order not to be denied what they are legally entitled to - are common in for example India. Kaushik Basu recently made a 'radical' proposal to reduce its occurrence: Legalize the act of giving the bribe and double the fine for accepting the bribe! We...

We use data from enforcement actions initiated under the U.S. Foreign Corrupt Practices Act (FCPA) to examine firms' incentives to pay bribes and their costs when they are caught. Bribery is associated with projects that are valuable even considering the expected penalties. For firms that are...

Regulators claim to reward firm cooperation in the enforcement process. However, critics question which actions constitute firm cooperation and contend that cooperation leads to “harsh” and “unfair” outcomes. Examining 1,162 enforcement actions for financial misrepresentation initiated...

This paper studies strategic interactions between public and private enforcement of accounting regulation and their consequences for the deterrence of financial misreporting. We develop an economic model with a manager, a public enforcement agency, and an investor and derive equilibrium...