White Paper | Lobbying Effective to Elude Fraud Investigations and Prosecutions

Posted by 4closureFraud on October 18, 2011 · 2 Comments 

CORPORATE LOBBYING AND FRAUD DETECTION

ABSTRACT

This paper examines the relation between corporate lobbying and fraud detection. Using data on corporate lobbying expenses between 1998 and 2004, and a sample of large frauds detected during the same period, we find that firms’ lobbying activities make a significant difference in fraud detection: compared to non-lobbying firms, firms that lobby on average have a significantly lower hazard rate of being detected for fraud, evade fraud detection 117 days longer, and are 38% less likely to be detected by regulators. In addition, fraudulent firms on average spend 77% more on lobbying than non-fraudulent firms, and spend 29% more on lobbying during their fraud periods than during their non-fraud periods. The delay in detection allows managers to postpone the negative market reaction and to sell more of their shares.

I can only imagine what the results would look like if this study was done between 2004 to 2011.

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4closureFraud.org

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CORPORATE LOBBYING AND FRAUD DETECTION

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Filed under bankruptcy, cdo, cds, Corruption, Fannie Mae, foreclosure, Foreclosure Fraud, Foreclosuregate, freddie mac, MERS, mortgage electronic registration system, Mortgage Fraud, securities fraud

Comments
2 Responses to “White Paper | Lobbying Effective to Elude Fraud Investigations and Prosecutions”
  1. CaitlinO says:
    October 18, 2011 at 6:56 PM

    So lobbyists provide a great return on investment for corporations that don’t want to face justice.

    One more reason to make lobbying illegal, along with corporate campaign contributions and corporate speech.

    Report this comment

  2. housemanrob says:
    October 18, 2011 at 4:14 PM

    …..good information……but obvious!

    Report this comment

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