{"id":9244,"date":"2012-06-05T16:19:47","date_gmt":"2012-06-05T20:19:47","guid":{"rendered":"http:\/\/stateimpact.npr.org\/new-hampshire\/?p=9244"},"modified":"2012-06-05T17:48:13","modified_gmt":"2012-06-05T21:48:13","slug":"remember-kozlowski-turns-out-a-bigger-yacht-means-higher-risk-of-corporate-fraud","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/new-hampshire\/2012\/06\/05\/remember-kozlowski-turns-out-a-bigger-yacht-means-higher-risk-of-corporate-fraud\/","title":{"rendered":"Remember Kozlowski? Turns Out A Bigger Yacht Means Higher Risk Of Corporate Fraud"},"content":{"rendered":"<div id=\"attachment_9251\"  class=\"wp-caption module image right\" style=\"max-width: 300px;\"><a class=\"fancybox\" title=\"\" href=\"http:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/06\/yacht.jpg\" rel=\"\"><img decoding=\"async\" loading=\"lazy\" class=\"size-medium wp-image-9251\" title=\"yacht\" src=\"http:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/06\/yacht-e1338932842346-300x236.jpg\" alt=\"\" width=\"300\" height=\"236\" srcset=\"https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/06\/yacht-e1338932842346-300x236.jpg 300w, https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/06\/yacht-e1338932842346.jpg 400w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><p class=\"wp-media-credit\">Patti Gravel<\/p><p class=\"wp-caption-text\"> <\/p><\/div>\n<p>In a new working paper from the <a href=\"http:\/\/www.nber.org\" target=\"_blank\">National Bureau of Economic Research<\/a>, economists Robert Davidson, Aiyesha Dey and Abbie J. Smith have drawn some intriguing conclusions about the relationship between a record of legal infractions like parking tickets, ownership of luxury goods like expensive cars, and the probability of corporate fraud and inaccurate financial reporting.<\/p>\n<p><strong>Minor Legal Infractions<\/strong><\/p>\n<p>The researchers found that CEOs and CFOs with prior legal infractions \u2014\u00a0especially traffic violations \u2014 have a &#8220;relatively high propensity to perpetrate fraud.&#8221; That means that CEOs with a record of legal infractions are more likely to be named in cases of corporate fraud than their more law-abiding counterparts.<\/p>\n<p><strong>Ownership of Luxury Goods<\/strong><\/p>\n<p>CEOs were defined as &#8220;unfrugal&#8221; if they owned a car valued above $75,000; a boat over 25 feet long; or a primary home worth two times the cost of most homes in zipcodes within 10 miles of the corporate headquarters\/an additional home worth two times the cost of most homes in that metropolitan area.<\/p>\n<p>CEOs who owned one or more of those luxury goods were not more likely to personally perpetrate fraud, but ran firms with a higher risk of firm-wide fraud and material reporting errors. \u00a0One question that begs is: if they knew then what we know now, could Tyco have prevented the whole\u00a0<a href=\"One question that begs is: if they knew then what we know now, could Tyco have prevented the whole Kozlowski fiasco?\" target=\"_blank\">Kozlowski fiasco<\/a>?<\/p>\n<p>The economists finished their report posing an interesting question: &#8220;Are the prior legal infractions and ownership of luxury goods by politicians related to their stewardship of\u00a0taxpayers\u2019 money?&#8221; Now <em>that<\/em> would make a super-duper StateImpact story!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In a new working paper from the National Bureau of Economic Research, economists Robert Davidson, Aiyesha Dey and Abbie J. Smith have drawn some intriguing conclusions about the relationship between a record of legal infractions like parking tickets, ownership of luxury goods like expensive cars, and the probability of corporate fraud and inaccurate financial reporting. [&hellip;]<\/p>\n","protected":false},"author":84,"featured_media":9251,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/posts\/9244"}],"collection":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/users\/84"}],"replies":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/comments?post=9244"}],"version-history":[{"count":0,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/posts\/9244\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/media\/9251"}],"wp:attachment":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/media?parent=9244"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/categories?post=9244"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/tags?post=9244"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}