文章基本信息

标题：Troublesome Tidings? Investors’ Response to a Wells Notice
本地全文：下载
作者：Paul A Griffin ; Paul A Griffin ; Estelle Y Sun 等
期刊名称：Accounting and Finance Research
印刷版ISSN：1927-5986
电子版ISSN：1927-5994
出版年度：2016
卷号：5
期号：1
DOI：10.5430/afr.v5n1p99
语种：English
出版社：Sciedu Press
摘要：While the SEC has issued Wells notices for many decades, scant evidence has amassed about how such notices might affect stock prices. This study fills that void and finds significantly negative excess stock returns over the three days around first-time Wells disclosures in company 8-K filings. For first-time 8-K disclosures that involve timely subsequent litigation, stock prices fall sharply, resulting in a cumulative average three-day excess stock return of -4.5 percent. In addition, we observe no significant price response for companies that may wait to disclose their first-time Wells disclosure in a 10-K or 10-Q, which raises the possibility that some managers choose the potentially less ethical option of disclosing on a delayed basis in a 10-K or 10-Q to avoid or mute the initial 8-K effect. Our results also imply that research on SEC or shareholder litigation or restatement events may have understated investors’ response to those events by not considering the earlier Wells notice response.
关键词：Wells notice;Securities and exchange commission;Investors’ response;Disclosure regulation;Event study