Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/203241
Authors: 
de Batz, Laure
Year of Publication: 
2019
Series/Report no.: 
IES Working Paper 22/2019
Abstract: 
This paper examines the spillovers of the sanction procedures on listed companies which were victims of others' financial regulatory breaches (i.e. regulated entities or individuals). Market manipulators can be investigated and possibly sanctioned for doing so, according to the French enforcement scheme. This research enriches past literature with a new complementary perspectivebon victims. Past work typically focused on abnormal returns primarily for investigated and/or sanctioned listed companies, as well as for plaintive firms, in a wide range of jurisdictions. The results demonstrate that victim firms suffer, on average, significant negative abnormal returns after the sanction. Naming victims hence may possibly be synonym of double punishment, as the firms already suffered during the violation period. It demonstrates a market failure where victims are not properly differentiated from wrongdoers. This article investigates the information content of such market behavior. The markets also incorporate the information content of the decision and of the parties at stake. All in all, those results plead for an anonymization of victims over the enforcement process, to protect from being sanctioned, and possibly suggest to name and shame market manipulators.
Subjects: 
Sanction
victim
financial markets
event study
regulation
fraud
information and market efficiency
listed companies
JEL: 
G14
G18
K42
N24
Document Type: 
Working Paper
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