Tuesday, February 26, 2019 - 4:10pm to 5:45pm
Location: 
Room 219, Flavelle Building, 78 Queen's Park

LAW & ECONOMICS COLLOQUIUM

presents

Colleen Honigsberg
Stanford Law School

Deleting Misconduct: The Expungement of BrokerCheck Records

Tuesday, February 26, 2019
4:10 - 5:45
Room FL219 / John Willis Classroom
78 Queen's Park

We examine the effects of a controversial process, known as expungement, that allows brokers to remove evidence of allegations of financial misconduct from FINRA’s public records. We show that brokers who receive expungements are more likely to be accused of misconduct in the future than similarly situated brokers. Using an instrumental variable to address endogeneity in the decision whether to grant an expungement, we study the effect of expungement on recidivism and other career outcomes. We also examine how these consequences vary by gender, ethnicity, and political affiliation. Finally, we offer a note of caution to researchers and investors using BrokerCheck data to study misconduct in the industry, as BrokerCheck data reflect cleansed adviser histories rather than a comprehensive sample of all historical adviser misconduct.

Colleen Honigsberg is an Assistant Professor at Stanford Law School, where her research is focused on the empirical study of corporate and securities law. Her scholarship uses a variety of econometric techniques and often requires examining new sources of data. Her recent papers have looked at the role creditors play in investment policy, the effects of hedge fund regulation, and the relationship between legal liability and audit quality. Her research, often timely, has been featured in major mainstream publications such as the Economist, the Wall Street Journal, and the New York Times, and her scholarship has been published in leading academic journals.

  For additional workshop information, please contact events.law@utoronto.ca