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Why do Companies meet with the SEC Chair?

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Item Summary

Title:Why do Companies meet with the SEC Chair?
Authors:Xin Zheng
Jim Naughton
Rafael Rogo
Keywords:SEC
Regulatory Capture
Political Connection
Date Issued:29 Aug 2019
Abstract:We examine whether meetings between the SEC Chair and public companies facilitate regulatory capture. Our analyses indicate that firms seek out meetings with the SEC Chair, as meetings are more likely to occur for politically active rather than industry leading firms, and meetings are more likely to occur during periods when the firm is under nonpublic investigation. In addition, we find that firms with meetings benefit from reduced monetary penalties, and that these reduced penalties are attributable, in part, to the favorable selection of the adjudication forum. These findings extend our understanding of how regulatory capture occurs at the SEC, and suggest that closed-door meetings between the SEC Chair and public companies may facilitate regulatory capture by providing a forum that helps firms negotiate for and obtain favorable regulatory outcomes.
URI:http://hdl.handle.net/10125/64861
Appears in Collections: 12 Financial: Labor Unions/Political Connections/Equity Valuation


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