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Securities Fraud and Corporate Finance: Recent Developments


Correspondence to: Finance Department, Kelley School of Business, Indiana University, Bloomington, IN, USA. E-mail:


In this paper, I survey the recent research in corporate finance on financial securities frauds. I structure my review around the three subjects in this literature: studies of internal and external factors that elicit managerial incentives for fraudulent activities, studies on regulatory and market-based mechanisms that help to deter or detect fraud and on what affects the efficiency of such mechanisms, and studies on the economic and social consequences of financial fraud. I outline the empirical challenges related to this line of research and discuss opportunities for future studies. Copyright © 2013 John Wiley & Sons, Ltd.