Predicting fraud by investment managers

• Main Authors: Dimmock, Stephen G., Gerken, William Christopher
• Other Authors: Nanyang Business School
• Format: Article
• Language: English
• Published: 2013
• Subjects: DRNTU::Business::Finance::Investments
• Online Access: https://hdl.handle.net/10356/100279; http://hdl.handle.net/10220/17824
• Institution: Nanyang Technological University

We test the predictability of investment fraud using a panel of mandatory disclosures filed with the SEC. We find that disclosures related to past regulatory and legal violations, conflicts of interest, and monitoring have significant power to predict fraud. Avoiding the 5% of firms with the highest...