Whistleblowers and Outcomes of Financial Misrepresentation Enforcement Actions

Andrew C. Call, Gerald S. Martin, Nathan Y. Sharp, Jaron H. Wilde

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

Whistleblowers are ostensibly a valuable resource to regulators investigating securities violations, but whether there is a link between whistleblower involvement and the outcomes of enforcement actions is unclear. Using a data set of employee whistleblowing allegations obtained from the U.S. government and the universe of enforcement actions for financial misrepresentation, we find that whistleblower involvement is associated with higher monetary penalties for targeted firms and employees and with longer prison sentences for culpable executives. We also find that regulators more quickly begin enforcement proceedings when whistleblowers are involved. Our findings suggest that whistleblowers are a valuable source of information for regulators who investigate and prosecute financial misrepresentation.

Original languageEnglish (US)
JournalJournal of Accounting Research
DOIs
StateAccepted/In press - 2017

Fingerprint

Whistleblower
Misrepresentation
Enforcement
Employees
Resources
Violations
Penalty
Government
Sources of information
Whistle blowing
Prison

Keywords

  • Enforcement actions
  • Financial reporting
  • Fraud
  • Penalties
  • Securities and Exchange Commission
  • Whistleblowers

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

Cite this

Whistleblowers and Outcomes of Financial Misrepresentation Enforcement Actions. / Call, Andrew C.; Martin, Gerald S.; Sharp, Nathan Y.; Wilde, Jaron H.

In: Journal of Accounting Research, 2017.

Research output: Contribution to journalArticle

@article{64ab86c2fae543059689699b205bfa7e,
title = "Whistleblowers and Outcomes of Financial Misrepresentation Enforcement Actions",
abstract = "Whistleblowers are ostensibly a valuable resource to regulators investigating securities violations, but whether there is a link between whistleblower involvement and the outcomes of enforcement actions is unclear. Using a data set of employee whistleblowing allegations obtained from the U.S. government and the universe of enforcement actions for financial misrepresentation, we find that whistleblower involvement is associated with higher monetary penalties for targeted firms and employees and with longer prison sentences for culpable executives. We also find that regulators more quickly begin enforcement proceedings when whistleblowers are involved. Our findings suggest that whistleblowers are a valuable source of information for regulators who investigate and prosecute financial misrepresentation.",
keywords = "Enforcement actions, Financial reporting, Fraud, Penalties, Securities and Exchange Commission, Whistleblowers",
author = "Call, {Andrew C.} and Martin, {Gerald S.} and Sharp, {Nathan Y.} and Wilde, {Jaron H.}",
year = "2017",
doi = "10.1111/1475-679X.12177",
language = "English (US)",
journal = "Journal of Accounting Research",
issn = "0021-8456",
publisher = "Wiley-Blackwell",

}

TY - JOUR

T1 - Whistleblowers and Outcomes of Financial Misrepresentation Enforcement Actions

AU - Call, Andrew C.

AU - Martin, Gerald S.

AU - Sharp, Nathan Y.

AU - Wilde, Jaron H.

PY - 2017

Y1 - 2017

N2 - Whistleblowers are ostensibly a valuable resource to regulators investigating securities violations, but whether there is a link between whistleblower involvement and the outcomes of enforcement actions is unclear. Using a data set of employee whistleblowing allegations obtained from the U.S. government and the universe of enforcement actions for financial misrepresentation, we find that whistleblower involvement is associated with higher monetary penalties for targeted firms and employees and with longer prison sentences for culpable executives. We also find that regulators more quickly begin enforcement proceedings when whistleblowers are involved. Our findings suggest that whistleblowers are a valuable source of information for regulators who investigate and prosecute financial misrepresentation.

AB - Whistleblowers are ostensibly a valuable resource to regulators investigating securities violations, but whether there is a link between whistleblower involvement and the outcomes of enforcement actions is unclear. Using a data set of employee whistleblowing allegations obtained from the U.S. government and the universe of enforcement actions for financial misrepresentation, we find that whistleblower involvement is associated with higher monetary penalties for targeted firms and employees and with longer prison sentences for culpable executives. We also find that regulators more quickly begin enforcement proceedings when whistleblowers are involved. Our findings suggest that whistleblowers are a valuable source of information for regulators who investigate and prosecute financial misrepresentation.

KW - Enforcement actions

KW - Financial reporting

KW - Fraud

KW - Penalties

KW - Securities and Exchange Commission

KW - Whistleblowers

UR - http://www.scopus.com/inward/record.url?scp=85021663265&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85021663265&partnerID=8YFLogxK

U2 - 10.1111/1475-679X.12177

DO - 10.1111/1475-679X.12177

M3 - Article

AN - SCOPUS:85021663265

JO - Journal of Accounting Research

JF - Journal of Accounting Research

SN - 0021-8456

ER -