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Re-examining the causes of corporate securities fraud
Descriptive
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Text
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Title
Re-examining the causes of corporate securities fraud
SubTitle
a criminological approach
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ETD_1800
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http://hdl.rutgers.edu/1782.2/rucore10002600001.ETD.000051309
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eng
Genre
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theses
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Topic
Criminal Justice
Subject
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(authority = ETD-LCSH)
Topic
Securities fraud
Subject
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(authority = ETD-LCSH)
Topic
Corporations--Corrupt practices
Abstract
The stock market provides investors with opportunities for wealth creation, but also allows corporations and brokers to commit securities fraud. To date, criminologists have paid little attention to corporate securities fraud and this dissertation is designed to shed light on the problem from a criminological perspective. It compares the extent to which the rational choice perspective and corporate structure theory can help explain corporate crime.
Using a case-control design, this research compares two groups of companies, litigated and non-litigated by the Securities and Exchange Commission (SEC). The comparison was made in terms of size, financial performance, top management, and board structure, while controlling for industry and geographic location. The case group consists of 188 companies litigated by the SEC for securities fraud between 1999 and 2003. Another 188 companies which never have been litigated by the SEC served as the control group. The data were drawn from the COMPUSTAT North America database and the companies’ annual reports and proxy statements which are available from the SEC website.
A Chi-Square analysis was used to analyze the relationship between firm size (independent variable) and litigation status (dependent variable), which was found to be statistically significant. Given that firm size might well affect the relationship between litigation status and other independent variables, a second group of control companies was selected while controlling for one more variable, firm size. Logistic regression was conducted to compare proposed causal variables and predict litigation status between litigated group and non-litigated group. The results found that small companies are more likely to be litigated. In addition, while average age of top management and financial performance are not significantly related to litigation status, length of service for top management and board structure are strongly associated with a company’s litigation status. These results provided support for the rational choice theory-related hypotheses. In particular, although firm size is significantly related to litigation status, the direction of the relationship is not consistent with the hypothesis based on the corporate structure theory.
Using a case-control design, this research compares two groups of companies, litigated and non-litigated by the Securities and Exchange Commission (SEC). The comparison was made in terms of size, financial performance, top management, and board structure, while controlling for industry and geographic location. The case group consists of 188 companies litigated by the SEC for securities fraud between 1999 and 2003. Another 188 companies which never have been litigated by the SEC served as the control group. The data were drawn from the COMPUSTAT North America database and the companies’ annual reports and proxy statements which are available from the SEC website.
A Chi-Square analysis was used to analyze the relationship between firm size (independent variable) and litigation status (dependent variable), which was found to be statistically significant. Given that firm size might well affect the relationship between litigation status and other independent variables, a second group of control companies was selected while controlling for one more variable, firm size. Logistic regression was conducted to compare proposed causal variables and predict litigation status between litigated group and non-litigated group. The results found that small companies are more likely to be litigated. In addition, while average age of top management and financial performance are not significantly related to litigation status, length of service for top management and board structure are strongly associated with a company’s litigation status. These results provided support for the rational choice theory-related hypotheses. In particular, although firm size is significantly related to litigation status, the direction of the relationship is not consistent with the hypothesis based on the corporate structure theory.
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electronic resource
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xi, 175 p.
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Note
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Ph.D.
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Includes bibliographical references (p. 159-166)
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by Yuxuan Nie
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Nie
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Yuxuan
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1975
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Yuxuan Nie
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Clarke
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Ronald
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Ronald Clarke
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Maxfiled
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Michael
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Michael Maxfiled
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Veysey
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Bonita
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Bonita Veysey
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Warren
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Danielle
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Danielle Warren
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Rutgers University
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Graduate School - Newark
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2009
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2009-05
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xx
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Rutgers University Electronic Theses and Dissertations
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Graduate School - Newark Electronic Theses and Dissertations
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doi:10.7282/T3CN743Q
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ETD doctoral
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Rights
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The author owns the copyright to this work.
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Copyright protected
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Open
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Nie
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Yuxuan
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Yuxuan Nie
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Rutgers University. Graduate School - Newark
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I hereby grant to the Rutgers University Libraries and to my school the non-exclusive right to archive, reproduce and distribute my thesis or dissertation, in whole or in part, and/or my abstract, in whole or in part, in and from an electronic format, subject to the release date subsequently stipulated in this submittal form and approved by my school. I represent and stipulate that the thesis or dissertation and its abstract are my original work, that they do not infringe or violate any rights of others, and that I make these grants as the sole owner of the rights to my thesis or dissertation and its abstract. I represent that I have obtained written permissions, when necessary, from the owner(s) of each third party copyrighted matter to be included in my thesis or dissertation and will supply copies of such upon request by my school. I acknowledge that RU ETD and my school will not distribute my thesis or dissertation or its abstract if, in their reasonable judgment, they believe all such rights have not been secured. I acknowledge that I retain ownership rights to the copyright of my work. I also retain the right to use all or part of this thesis or dissertation in future works, such as articles or books.
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