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Investors around the world are eager to buy shares of newly‐privatized state firms. This behavior is understandable in light of the evidence that many governments underprice initial public offerings. This paper looks at Eastern Europe's first public offerings of privatized state firms (in Poland) and finds evidence of significant underpricing. We also find that the level of underpricing was masked by special discounts and the redemption, at par, of discounted government bonds. Using conservative assumptions we conclude that underpricing was almost 30%, three times the level reflected by recorded stock prices. Our study of the new Polish stock market indicates the need for caution when using data from developing capital markets. Prices, returns, trends and market capitalization rates in Poland were affected by unique, local financial practices.

Conventional wisdom dictates that if you represent a corporate entity (or even a senior corporate official) involved in a securities or other regulatory investigation ‐ whether by the U.S. Securities and Exchange Commission, U.S. Department of Justice, U.S. Attorney’s Office, Commodities Futures Trading Commission, New York Stock Exchange, National Association of Securities Dealers or one or more of the state attorneys general or other federal or state regulators ‐ it is important to cooperate fully in the investigation, even if that means “confessing” to corporate wrongdoing. Indeed, there are many benefits to cooperation, such as potentially avoiding criminal prosecution or an enforcement proceeding altogether or negotiating reduced penalties. And for regulated industries or regulated entities, there may be no choice but to provide full cooperation in order to avoid making an enemy of your regulator. But there are important potential pitfalls as well to cooperating with governmental or self‐regulatory investigations ‐ pitfalls that sometimes outweigh the benefits of cooperation. These potential pitfalls include bringing problems to the government’s attention about which it might not learn otherwise, or strengthening the government’s case against your client by doing the regulators’ work for them, such as by marshalling the evidence against your client for use by the regulators. And more and more, regulators are requiring entities to waive the protections of the attorney‐client privilege and work‐product doctrine as one of the prices you need to pay to be treated as a cooperator. If a regulatory authority insists on a privilege waiver, any documents turned over to the agency also may be available to potential third‐party litigants, such as the class‐action bar, or other government entities. In fact, the regulatory agency itself may use the formerly privileged materials to support a complaint against your client. Because of these potential pitfalls, the cooperation road may resemble a minefield at times, with the client one wrong step away from disaster. For that reason, it is critical for counsel to avoid reflexively choosing to cooperate in a regulatory investigation aimed at his or her client. Although cooperation may turn out to be the right approach to many regulatory investigations, each situation must be analyzed based upon its own individual facts so that the benefits of cooperation can be balanced appropriately against the pitfalls before making an informed decision as to what is best for the client in any particular circumstance.

The purpose of this paper is to recommend proactive measures that companies should take to manage reports of securities violations under the SEC's new whistleblower program.

The paper explains the whistleblower bounty program and recommends ten proactive measures that companies should consider.

Companies have an incentive to investigate reports of potential violations quickly while also ensuring compliance with the anti‐retaliation protections.

Companies should take steps now to bolster internal reporting and investigative procedures and encourage employees to utilize internal reporting mechanisms.

The paper provides expert advice from experienced securities and financial services lawyers.

Microfoundations of institutions are central to constructing place – the interplay of location, meaning, and material form. Since only a few institutional studies bring materiality to the fore to examine the processes of place-making, how material forms interact with people to institutionalize or de-institutionalize the meaning of place remains a black box. Through an inductive and historical study of Boston’s North End neighborhood, the authors show how material practices shaped place-making and institutionalized, or de-institutionalized, the meaning of the North End. When material practices symbolically encoded meanings of diverse audiences into the church, it created resonance and enabled the building’s meanings to withstand environmental change and become institutionalized as part of the North End’s meaning as a place. In contrast, when the material practices restricted meaning to a specific audience, it limited resonance when the environment changed, was more likely to be demolished and, thus, erased rather than institutionalized into the meaning of the North End as a place.

The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and ideology of the FTC’s leaders, developments in the field of economics, and the tenor of the times. The over-riding current role is to provide well considered, unbiased economic advice regarding antitrust and consumer protection law enforcement cases to the legal staff and the Commission. The second role, which long ago was primary, is to provide reports on investigations of various industries to the public and public officials. This role was more recently called research or “policy R&D”. A third role is to advocate for competition and markets both domestically and internationally. As a practical matter, the provision of economic advice to the FTC and to the legal staff has required that the economists wear “two hats,” helping the legal staff investigate cases and provide evidence to support law enforcement cases while also providing advice to the legal bureaus and to the Commission on which cases to pursue (thus providing “a second set of eyes” to evaluate cases). There is sometimes a tension in those functions because building a case is not the same as evaluating a case. Economists and the Bureau of Economics have provided such services to the FTC for over 100 years proving that a sub-organization can survive while playing roles that sometimes conflict. Such a life is not, however, always easy or fun.

Aarhus Kommunes Biblioteker (Teknisk Bibliotek), Ingerslevs Plads 7, Aarhus, Denmark. Representative: V. NEDERGAARD PEDERSEN (Librarian).

The purpose of this paper is to present an affect account that identifies emotions driving sell preferences in stock markets that result in the disposition effect (winning stocks hold too short and losing stocks too long) and to specify how stock prices are influenced.

The affect account is derived based on analyses of previous research showing the disposition effect, proposed explanations of the effect, and basic emotion research. An individual-level analysis is performed of the consequences for stock market prices.

The main proposal is that investors prefer to sell when price increases make the increasing balance of hope and fear equal to a faster increasingly balance of anticipated elation and disappointment, and when price decreases make the faster increasingly negative hope-fear balance equal to the increasing negative elation-disappointment balance. Steepness in slope of the negative hope-fear balance accounts for whether a loser is never sold (an extreme disposition effect), sold later than a winning stock (the usually observed disposition effect), or sold earlier than a winning stock (a reverse disposition effect). The individual-level analysis suggests that the affect-driven disposition effect would intensify or attenuate trends in stock prices depending on the demand-supply balance.

A conceptual contribution to research of emotion influences on stock trading and specifically to explanations of the disposition effect on sell decisions by less sophisticated and experienced investors.

Speaking about hedge funds, Stephen M. Cutler, Director of the United States Securities and Exchange Commission’s Division of Enforcement, stated that “firms that provide… prime brokerage services while recommending that fund to their customers may raise conflict issues as thorny as the hedging strategies these funds employ.” These conflicts have contributed to an increased level of regulatory scrutiny over hedge funds and their relationships with brokers. The purpose of this article is to discuss the regulatory background surrounding the relationship between hedge funds and their prime brokers and capital introduction programs sponsored by prime brokers.

Over the years, many upstream health policies have sought to reduce smoking across populations. While smoking has been substantially reduced, the effects of these policies on education-smoking gradient remain unclear. The present paper compares the education-smoking gradient among the Generation X and the millennials, who grew up with different types of upstream policies.

The study relies on regression analysis. The data are from the Canadian Tobacco, Alcohol and Drugs Survey of 2017, with the sample restricted to those born between 1965 and 1995.

At the zero-order, the education-smoking gradient has not significantly flattened from Generation X to millennials. And, accounting for the channels of impact of education on smoking does not substantially change this pattern.

The implications for health inequalities associated with socioeconomic status, and tobacco consumption reduction policies, are discussed.

This paper is the first study of the kind using Canadian data.