Portal de Periódicos da CAPES

A Theory of Corporate Scandals: Why the U.S. and Europe Differ

2005; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.694581

1556-5068

John C. Coffee,

Corporate Finance and Governance

A wave of financial irregularity broke out in the United States in 2001-2002, culminating in the Sarbanes-Oxley Act of 2002. A worldwide stock market bubble burst over this same period, with the actual market decline on a percentage basis being somewhat more severe in Europe. Yet, no corresponding wave of financial scandals involving a similar level of companies broke out in Europe. Indeed, those scandals that did arise in Europe often had American roots (e.g., Vivendi, Ahold, Adecco, etc.). Given the higher level of public and private enforcement in the United States for securities fraud, this contrast seems perplexing.