"This paper examines capital market effects of changes in securities regulation. We analyze two key capital market directives in the European Union (EU) that tightened market abuse and transparency regulation and, in particular, their enforcement. All EU member states were required to adopt...

We analyze a comprehensive sample of more than 10,000 U.S. OTC stocks. We first show that the OTC market is a large, diverse, and dynamic trading environment with a rich set of regulatory and disclosure regimes, comprising venue rules and state laws beyond SEC regulation. We then exploit this...