Law Commons^™

Lessons From Single-Company Event Studies: The Importance Of Controlling For Company-Specific Events, Scott D. Hakala

Scott D Hakala

Single-company event studies are commonly employed in applied practice, such as in analyzing market efficiency, reliance, and damages in securities litigation. However, the presence of significant company-specific events among the observations used to estimate the market model results in significantly biased, overstated standard errors (a well-known omitted variables problem) and less reliable coefficient estimates in such studies. This is a frequently over-looked or neglected issue that renders the statistical inferences in single-company event studies employing using more traditional event study techniques biased and often unreliable. This paper demonstrates through simulation and actual examples that, even allowing for errors in implementation, …

Trust And The Reform Of Securities Regulation, Ronald J. Colombo

Ronald J Colombo

Trust is a critically important ingredient in the recipes for a successful economy and a well-functioning securities market. Due to scandals, ranging in nature from massive incompetence, to massive irresponsibility, to massive fraud, investor trust is in shorter supply today than in years past. This is troubling, and commentators, policy makers, and industry leaders have all recognized the need for trust's restoration.

As in times of similar crises, many have turned to law and regulation for the answers to our problems. The imposition of additional regulatory oversight, safeguards, and remedies, some advocate, can help resuscitate investor trust. These advocates have …

Heedless Globalism: The Sec's Roadmap To Accounting Convergence, William W. Bratton

All Faculty Scholarship

The Securities Exchange Commission (SEC) has introduced a "Roadmap" that describes a process leading to mandatory use of International Financial Reporting Standards (IFRS) by domestic issuers by 2014. The SEC justifies this initiative on the grounds that global standardization yields cost savings and an ultimate gain in comparability, facilitating the search for global opportunities by u.s. investors and making u.s. capital markets more attractive to foreign issuers. This Article shows that the offered justification is inadequate. The SEC frames the matter as a choice between two institutional frameworks for standard setting, holding out high quality sets of standards, asking which …