Our evidence shows that GCs generally behave similar to other top-level executives. They are heavy sellers of their own firm’s stocks during the class periods and they profit abnormally by avoiding the stock price declines upon revelation of the fraud at the end of the class periods. Our evidence is consistent with the hypothesis that the GCs are part of the fraudulent group and therefore they should be treated the same.
Aqui: Why Don’t General Counsels Stop Corporate Crime?
“Yet there are other havens too: “crime havens” (like Panama) and perhaps at least as important, “regulatory havens.” The biggest of these is the UK/City of London, which rebuilt its financial grandeur after the collapse of the British Empire in large part by offering Wall Street banks an “offshore” escape route from New Deal regulations in the US. It is no coincidence that AIG Financial Products, the unit that blew up its US parent in the global financial crisis by taking positions in the derivatives market with a notional value of $2.7 trillion, was based in Curzon Street. As the Democratic Congresswoman Carolyn Maloney put it, there has been a “disturbing pattern in the last few years of London literally becoming the centre of financial trading disasters.” Many other havens have moved into this game too: last year, for instance, a Reuters investigation found at least $3.3 trillion in loans sitting in Cayman-based off-balance sheet entities. These kinds of games are all about escaping the banking rules and laws that crimp your profits. This is offshore business.”