Scandal Enforcement at the SEC: The Arc of the Option Backdating Investigations

We study the SEC’s allocation of enforcement resources in the wake of a salient public scandal. We focus on the SEC’s investigations of option backdating in the wake of numerous media articles on the practice of backdating. We find that the SEC shifted its mix of investigations significantly toward backdating investigations and away from investigations involving other accounting issues. We test the hypothesis that SEC pursued more marginal investigations into backdating at the expense of pursuing more egregious accounting issues. Our event study of stock market reactions to the initial disclosure of backdating investigations shows that those reactions declined over our sample period. We also find that later backdating investigations are less likely to target individuals and less likely to be accompanied by a parallel criminal investigation. Looking at the consequences of the SEC’s backdating investigations, later investigations were more likely to be terminated or produce no monetary penalties. We find that the magnitude of the option backdating accounting errors diminished over time relative to other accounting errors that attracted SEC investigations

Food demand displaced by global refugee migration influences water use in already water stressed countries

Millions of people displaced by conflicts have found refuge in water-scarce countries, where their perceived effect on water availability has shaped local water security discourses. Using an annual global data set, we explain the effects of refugee migrations on the host countries' water stress through the food demand displaced by refugees and the water necessary to produce that food. The water footprint of refugee displacement increased by nearly 75% globally between 2005 and 2016. Although minimal in most countries, implications can be severe in countries already facing severe water stress. For example, refugees may have contributed up to 75 percentage points to water stress in Jordan. While water considerations should not, alone, determine trade and migration policy, we find that small changes to current international food supply flows and refugee resettlement procedures can potentially ease the effect of refugee displacement on water stress in water-vulnerable countries

Scandal Enforcement at the SEC: The Arc of the Option Backdating Investigations

We study the SEC’s allocation of enforcement resources in the wake of a salient public scandal. We focus on the SEC’s investigations of option backdating in the wake of numerous media articles on the practice of backdating. We find that the SEC shifted its mix of investigations significantly toward backdating investigations and away from investigations involving other accounting issues. We test the hypothesis that SEC pursued more marginal investigations into backdating at the expense of pursuing more egregious accounting issues. Our event study of stock market reactions to the initial disclosure of backdating investigations shows that those reactions declined over our sample period. We also find that later backdating investigations are less likely to target individuals and less likely to be accompanied by a parallel criminal investigation. Looking at the consequences of the SEC’s backdating investigations, later investigations were more likely to be terminated or produce no monetary penalties. We find that the magnitude of the option backdating accounting errors diminished over time relative to other accounting errors that attracted SEC investigations

Institutions, Voids, and Dependencies: Tracing the Designs and Robustness of Urban Water Systems

Urban water systems across the United States are facing a variety of challenges to existing supply and demand dynamics. Responding to these challenges in complex socio-environmental systems (SES) requires integrating various types of information – ranging from hydrologic data to political considerations and beyond – into policy and management decisions. However, the design of institutions, i.e., the formal rules in which urban water utilities are embedded, impact the flow of information, especially across diverse actor groups critical to developing and implementing policy or programmatic responses to signal error. This study develops a Bayesian application of the Robustness of Coupled Infrastructure Systems (CIS) Framework to analyze how the institutional design of a major U.S. urban water system impacts information flow and, ultimately, the goal of resource-delivery robustness. We utilize process-tracing along with an institutional analysis approach called the Institutional Grammar Tool (IGT) to parse formal institutions into their semantic and syntactic components and assess how they may influence a system’s capacity to respond to changing stressors. Our findings have important implications for the (re)design of institutions that better facilitate information flow among key policy actors and support policy changes that promote sustainable long-term urban water supply