Financial markets and securities regulation in the European Union and the United States are converging in an increasing number of areas, from the repression of market manipulation to the provision of stricter requirements for market gatekeepers, such as auditing firms …

The Securities and Exchange Commission (SEC or Commission) is considering proposals that would require public companies to disclose reliable and complete information about the risks of climate change.  The Commission’s efforts will fall short, however, unless it addresses the role …

In a recent paper, we examine the real effects of disclosure in going private transactions.  The number of companies going private has been steadily increasing over the past decade, with a sharp rise during the last couple of years. This …

Share buybacks have returned with a vengeance following the COVID-19 pandemic.[1] The average proportion of buybacks out of aggregate shareholder payouts in 2019-2021 was higher than the historical average during 2005-2019 in the U.S. and Europe.[2] These developments …

The SEC has proposed mandating climate disclosure to meet investor demand for information about the environmental risks firms face and managers’ plans to mitigate their firms’ environmental impacts.  Yet critics worry that the proposed mandate would increase risks of litigation …

Studies have shown that the disclosure of information can affect a company’s technological innovation in different ways, depending on how complete or timely it is. The complete disclosure can promote innovation by making capital providers more receptive to providing financing, …

Fraud-on-the-market (“FOTM”) suits are thought to generate considerable benefits for society – namely, those associated with increased stock-market liquidity and price accuracy. But these suits are also said to impose outsized costs. The federal courts have thus long tried to …

Materiality is a ubiquitous concept in accounting and auditing. Accounting and disclosure rules, with few exceptions, are bounded by materiality, meaning that if a matter is immaterial, it is often exempted from the accounting rules. In respect to audits, the …

Under Chair Gary Gensler, the U.S. Securities and Exchange Commission (SEC) has been on a transparency rampage – proposing extensive new disclosure obligations on public companies, activist investors, private funds, and (maybe soon) so-called “unicorn” startups. …

We are constantly bombarded with warnings about dangers to our health or wellbeing. Sometimes, however, the warnings might facilitate the danger. In a new article, I show how the cautionary statements that commonly accompany predictions of corporate performance fall into …

The role of the audit committee in a company’s board of directors has changed significantly since the passage of the Sarbanes-Oxley Act of 2002 (SOX). Traditionally, audit committees have overseen the company’s independent auditor, the internal audit function, and other …

Investors are increasingly incorporating assessments of companies’ performance on environmental, social, and governance (ESG) issues in their portfolio decisions. The global assets under management of the signatories to the United Nations Principles for Responsible Investment (PRI) have grown from about …

A common argument against stakeholder governance is that it renders managers less accountable while doing little to improve the welfare of stakeholders. Lucian Bebchuk and Roberto Tallarita call this “The Illusory Promise of Stakeholder Governance.” But what if stakeholder governance …