Do More Transparent Corporate Actions Following a Restatement Influence the SEC's Decision to Issue an Enforcement Action?

This study examines whether corporate transparency about a restatement influences the Securities and Exchange Commission's (SEC) decision to issue an enforcement action. I consider corporate transparency to be higher when firms initiate an independent investigation into the restatement, display the restatement in a more prominent press release location, and/or report the restatement in a more visible SEC filing (i.e., Form 8-K). My sample of restatement observations spans nine years, 1997-2005, and is taken from the databases compiled by the General Accounting Office. For each restatement observation, I hand-collect information on SEC enforcement actions from the SEC's website and information on corporate transparency from company press releases and SEC filings. In order to determine the influence of corporate transparency, I develop a model predicting which restatement firms will be sanctioned by the SEC that includes measures of restatement severity, restatement characteristics, firm characteristics, and all three measures of corporate transparency. I find that, on average, greater restatement transparency increases the likelihood of an SEC sanction. This result is strongest before the Sarbanes-Oxley Act of 2002 (SOX), where all three proxies for corporate transparency are positive and significant predictors of SEC enforcement actions. After SOX, however, more visible SEC filings decrease the likelihood of an SEC sanction, suggesting that the SEC rewards this type of transparent behavior. In addition, the SEC also rewards corporate transparency by reducing monetary penalties when an enforcement action is issued. These results extend prior research (Bowen et al. 2005; Files et al. 2008; Gordon et al. 2008; Myers et al. 2008) by providing the first evidence on how corporate transparency affects the SEC's decision to issue an enforcement action. The results may be useful to managers of restating firms and academics researching SEC enforcement actions

The Impact of Restatements on Bank Loans: Evidence from the Supply Chain The Impact of Restatements on Bank Loans: Evidence from the Supply Chain

ABSTRACT: We investigate whether financial restatements announced by peer firms, suppliers, or customers influence the interest rate a borrower receives from lenders. A restatement by a peer firm (within the same industry) increases a borrower"s loan spread by an average of six basis points, after controlling for other factors including firm size, leverage, and default risk. This effect becomes more pronounced if the borrower operates in a relatively non-concentrated industry or the peer restatement involves revenue recognition issues. Restatements announced in a major customer industry also increase the loan spread of the borrowing firm by seven basis points, while supplier restatements impact loan spread only in the most severe cases. We are the first to document that restatements influence the loan contracting terms of other (non-restating) firms. Our results also shed light on the extent to which lenders utilize information from along the supply chain when setting contract terms. JEL Classification: G10, G34, L8

The Association of Baseline Plasma SARS-CoV-2 Nucleocapsid Antigen Level and Outcomes in Patients Hospitalized With COVID-19

BackgroundLevels of plasma SARS-CoV-2 nucleocapsid (N) antigen may be an important biomarker in patients with COVID-19 and enhance our understanding of the pathogenesis of COVID-19.ObjectiveTo evaluate whether levels of plasma antigen can predict short-term clinical outcomes and identify clinical and viral factors associated with plasma antigen levels in hospitalized patients with SARS-CoV-2.DesignCross-sectional study of baseline plasma antigen level from 2540 participants enrolled in the TICO (Therapeutics for Inpatients With COVID-19) platform trial from August 2020 to November 2021, with additional data on day 5 outcome and time to discharge.Setting114 centers in 10 countries.ParticipantsAdults hospitalized for acute SARS-CoV-2 infection with 12 days or less of symptoms.MeasurementsBaseline plasma viral N antigen level was measured at a central laboratory. Delta variant status was determined from baseline nasal swabs using reverse transcriptase polymerase chain reaction. Associations between baseline patient characteristics and viral factors and baseline plasma antigen levels were assessed using both unadjusted and multivariable modeling. Association between elevated baseline antigen level of 1000 ng/L or greater and outcomes, including worsening of ordinal pulmonary scale at day 5 and time to hospital discharge, were evaluated using logistic regression and Fine-Gray regression models, respectively.ResultsPlasma antigen was below the level of quantification in 5% of participants at enrollment, and 1000 ng/L or greater in 57%. Baseline pulmonary severity of illness was strongly associated with plasma antigen level, with mean plasma antigen level 3.10-fold higher among those requiring noninvasive ventilation or high-flow nasal cannula compared with room air (95% CI, 2.22 to 4.34). Plasma antigen level was higher in those who lacked antispike antibodies (6.42 fold; CI, 5.37 to 7.66) and in those with the Delta variant (1.73 fold; CI, 1.41 to 2.13). Additional factors associated with higher baseline antigen level included male sex, shorter time since hospital admission, decreased days of remdesivir, and renal impairment. In contrast, race, ethnicity, body mass index, and immunocompromising conditions were not associated with plasma antigen levels. Plasma antigen level of 1000 ng/L or greater was associated with a markedly higher odds of worsened pulmonary status at day 5 (odds ratio, 5.06 [CI, 3.41 to 7.50]) and longer time to hospital discharge (median, 7 vs. 4 days; subhazard ratio, 0.51 [CI, 0.45 to 0.57]), with subhazard ratios similar across all levels of baseline pulmonary severity.LimitationsPlasma samples were drawn at enrollment, not hospital presentation. No point-of-care test to measure plasma antigen is currently available.ConclusionElevated plasma antigen is highly associated with both severity of pulmonary illness and clinically important patient outcomes. Multiple clinical and viral factors are associated with plasma antigen level at presentation. These data support a potential role of ongoing viral replication in the pathogenesis of SARS-CoV-2 in hospitalized patients.Primary funding sourceU.S. government Operation Warp Speed and National Institute of Allergy and Infectious Diseases

Efficacy and safety of two neutralising monoclonal antibody therapies, sotrovimab and BRII-196 plus BRII-198, for adults hospitalised with COVID-19 (TICO): a randomised controlled trial

BackgroundWe aimed to assess the efficacy and safety of two neutralising monoclonal antibody therapies (sotrovimab [Vir Biotechnology and GlaxoSmithKline] and BRII-196 plus BRII-198 [Brii Biosciences]) for adults admitted to hospital for COVID-19 (hereafter referred to as hospitalised) with COVID-19.MethodsIn this multinational, double-blind, randomised, placebo-controlled, clinical trial (Therapeutics for Inpatients with COVID-19 [TICO]), adults (aged ≥18 years) hospitalised with COVID-19 at 43 hospitals in the USA, Denmark, Switzerland, and Poland were recruited. Patients were eligible if they had laboratory-confirmed SARS-CoV-2 infection and COVID-19 symptoms for up to 12 days. Using a web-based application, participants were randomly assigned (2:1:2:1), stratified by trial site pharmacy, to sotrovimab 500 mg, matching placebo for sotrovimab, BRII-196 1000 mg plus BRII-198 1000 mg, or matching placebo for BRII-196 plus BRII-198, in addition to standard of care. Each study product was administered as a single dose given intravenously over 60 min. The concurrent placebo groups were pooled for analyses. The primary outcome was time to sustained clinical recovery, defined as discharge from the hospital to home and remaining at home for 14 consecutive days, up to day 90 after randomisation. Interim futility analyses were based on two seven-category ordinal outcome scales on day 5 that measured pulmonary status and extrapulmonary complications of COVID-19. The safety outcome was a composite of death, serious adverse events, incident organ failure, and serious coinfection up to day 90 after randomisation. Efficacy and safety outcomes were assessed in the modified intention-to-treat population, defined as all patients randomly assigned to treatment who started the study infusion. This study is registered with ClinicalTrials.gov, NCT04501978.FindingsBetween Dec 16, 2020, and March 1, 2021, 546 patients were enrolled and randomly assigned to sotrovimab (n=184), BRII-196 plus BRII-198 (n=183), or placebo (n=179), of whom 536 received part or all of their assigned study drug (sotrovimab n=182, BRII-196 plus BRII-198 n=176, or placebo n=178; median age of 60 years [IQR 50-72], 228 [43%] patients were female and 308 [57%] were male). At this point, enrolment was halted on the basis of the interim futility analysis. At day 5, neither the sotrovimab group nor the BRII-196 plus BRII-198 group had significantly higher odds of more favourable outcomes than the placebo group on either the pulmonary scale (adjusted odds ratio sotrovimab 1·07 [95% CI 0·74-1·56]; BRII-196 plus BRII-198 0·98 [95% CI 0·67-1·43]) or the pulmonary-plus complications scale (sotrovimab 1·08 [0·74-1·58]; BRII-196 plus BRII-198 1·00 [0·68-1·46]). By day 90, sustained clinical recovery was seen in 151 (85%) patients in the placebo group compared with 160 (88%) in the sotrovimab group (adjusted rate ratio 1·12 [95% CI 0·91-1·37]) and 155 (88%) in the BRII-196 plus BRII-198 group (1·08 [0·88-1·32]). The composite safety outcome up to day 90 was met by 48 (27%) patients in the placebo group, 42 (23%) in the sotrovimab group, and 45 (26%) in the BRII-196 plus BRII-198 group. 13 (7%) patients in the placebo group, 14 (8%) in the sotrovimab group, and 15 (9%) in the BRII-196 plus BRII-198 group died up to day 90.InterpretationNeither sotrovimab nor BRII-196 plus BRII-198 showed efficacy for improving clinical outcomes among adults hospitalised with COVID-19.FundingUS National Institutes of Health and Operation Warp Speed

Vaccine effectiveness of primary series and booster doses against covid-19 associated hospital admissions in the United States: living test negative design study

AbstractObjectiveTo compare the effectiveness of a primary covid-19 vaccine series plus booster doses with a primary series alone for the prevention of hospital admission with omicron related covid-19 in the United States.DesignMulticenter observational case-control study with a test negative design.SettingHospitals in 18 US states.Participants4760 adults admitted to one of 21 hospitals with acute respiratory symptoms between 26 December 2021 and 30 June 2022, a period when the omicron variant was dominant. Participants included 2385 (50.1%) patients with laboratory confirmed covid-19 (cases) and 2375 (49.9%) patients who tested negative for SARS-CoV-2 (controls).Main outcome measuresThe main outcome was vaccine effectiveness against hospital admission with covid-19 for a primary series plus booster doses and a primary series alone by comparing the odds of being vaccinated with each of these regimens versus being unvaccinated among cases versus controls. Vaccine effectiveness analyses were stratified by immunosuppression status (immunocompetent, immunocompromised). The primary analysis evaluated all covid-19 vaccine types combined, and secondary analyses evaluated specific vaccine products.ResultsOverall, median age of participants was 64 years (interquartile range 52-75 years), 994 (20.8%) were immunocompromised, 85 (1.8%) were vaccinated with a primary series plus two boosters, 1367 (28.7%) with a primary series plus one booster, and 1875 (39.3%) with a primary series alone, and 1433 (30.1%) were unvaccinated. Among immunocompetent participants, vaccine effectiveness for prevention of hospital admission with omicron related covid-19 for a primary series plus two boosters was 63% (95% confidence interval 37% to 78%), a primary series plus one booster was 65% (58% to 71%), and for a primary series alone was 37% (25% to 47%) (P<0.001 for the pooled boosted regimens compared with a primary series alone). Vaccine effectiveness was higher for a boosted regimen than for a primary series alone for both mRNA vaccines (BNT162b2 (Pfizer-BioNTech): 73% (44% to 87%) for primary series plus two boosters, 64% (55% to 72%) for primary series plus one booster, and 36% (21% to 48%) for primary series alone (P<0.001); mRNA-1273 (Moderna): 68% (17% to 88%) for primary series plus two boosters, 65% (55% to 73%) for primary series plus one booster, and 41% (25% to 54%) for primary series alone (P=0.001)). Among immunocompromised patients, vaccine effectiveness for a primary series plus one booster was 69% (31% to 86%) and for a primary series alone was 49% (30% to 63%) (P=0.04).ConclusionDuring the first six months of 2022 in the US, booster doses of a covid-19 vaccine provided additional benefit beyond a primary vaccine series alone for preventing hospital admissions with omicron related covid-19.Readers’ noteThis article is a living test negative design study that will be updated to reflect emerging evidence. Updates may occur for up to two years from the date of original publication