This study examines the relevance of modified audit opinions (MAO) in private debt contracting. We use the auditor's explanatory language to partition MAOs into Inconsistency opinions, resulting from an accounting change or a restatement; and Inadequacy opinions, arising from a material...

We provide evidence of a non-intuitive link between equity analysts and bank loans. We hypothesize and find that the precision of the private information in sell-side equity analysts' earnings forecasts is associated with price and non-price characteristics of private debt. Using a measure of...

I examine the ability of the U.S. investor protection regime to limit insider trading returns, absent Section 16(b) of the Securities Exchange Act of 1934 (the short-swing rule). I find that, in this setting, U.S. insiders execute short-swing trades that (i) beat the market by about 15 basis...

Motivated by survey evidence, we examine the relation between worker substance abuse and workplace fraud. In our sample of medical doctors, nearly 10% of all frauds occur in the 0.01% of worker-years when the doctor receives a professional sanction for substance abuse. Doctors receiving such...

Unlike purely domestic firms, globalized firms have unique opportunities to engage in international tax planning activities. This study examines whether banks consider international tax planning, and in particular potential earnings repatriation taxes, when setting loan contracts for...

We examine the market reaction to charitable pledges by individual blockholders of public firms. As this philanthropy may signal a weakening preference for wealth maximization and maybe indicative of distraction or relaxed monitoring, these agency costs may overwhelm any reputation benefits. We...

Previous research documents a negative stock price reaction to the announcement of a debt covenant violation (DCV). However, managers of firms that violate a covenant often obtain waivers and renegotiate debt contracts with lenders before the SEC requires them to disclose a violation. Firms...

We examine the profitability of stock trades executed by SEC employees. Subject to the considerable constraints of the data (no portfolio information, occupational details, or individual identifiers and inability to determine actual profitability of trades), we find that a hedge portfolio...

Analyzing a large sample of non-U.S. public firms from 31 countries that obtain private loans, we find that loan syndicates that lend to borrowers that employ Big N auditors are larger and less concentrated and that the lead arrangers and largest investors of these syndicates are able to hold a...