# Ndpa `kaal:entity:ndpa` **Status.** derived This node is assembled mechanically from the 20 claims that carry the concept tag `ndpa`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 20 claims across 1 works, 2015 to 2015. **2015** - [2629451-001](https://wulfkaal.github.io/claims/2629451-001) [empirical/evidenced] -- Stock prices respond significantly and predictably in a positive direction to the DOJ press release announcing execution of a non- or deferred prosecution agreement and to the start of the N/DPA term. > We document a significant and predictable positive stock price response to the DOJ press release and the start of the N/DPA term. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-002](https://wulfkaal.github.io/claims/2629451-002) [empirical/evidenced] -- The market does not price the three defining N/DPA events in isolation; it treats the announcement, the start of the term, and the end of the term as sequential and conditional events. > Our tests indicate that the market interprets the three events not in isolation but as sequential and conditional events. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-003](https://wulfkaal.github.io/claims/2629451-003) [empirical/evidenced] -- Investor response to N/DPAs is not uniform: it varies with the firm's industry, the severity of the financial fine, and the extent of the governance improvements the N/DPA mandates. > We also find that investor's response differs depending on the industry and severity of financial fines and N/DPA mandated governance improvements. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-004](https://wulfkaal.github.io/claims/2629451-004) [empirical/evidenced] -- There is no systematic price momentum beyond the three core N/DPA event dates, which the authors read as evidence that the market is reasonably efficient with respect to N/DPA information. > We observe no systematic price momentum beyond the three core dates identified in our study, implying that the market is reasonably efficient with respect to information about N/DPAs. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-005](https://wulfkaal.github.io/claims/2629451-005) [empirical/evidenced] -- Investors react negatively to impending N/DPA driven changes in the period before the agreement is executed, but once the N/DPA is executed they generally treat it as a positive event for the firm. > Our results suggest that while investors consistently react negatively to impending N/DPA changes prior to N/DPA execution, post N/DPA execution, investors generally do perceive N/DPAs as a positive event for the respective entity. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-006](https://wulfkaal.github.io/claims/2629451-006) [empirical/evidenced] -- Investors treat the expiration of an N/DPA term as a negative event for the firm. > Inversely, our results suggest that investors see the expiry of applicable N/DPA terms as a negative event. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-007](https://wulfkaal.github.io/claims/2629451-007) [mechanism/argued] -- The combination of a positive market reaction at the start of the N/DPA term and a negative reaction at its end is evidence that the governance changes N/DPAs mandate actually matter to firm value. > We interpret the positive market reaction at the beginning of the N/DPA term and investors' negative reaction at the end of the N/DPA term as evidence that governance changes mandated by N/DPAs matter. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-009](https://wulfkaal.github.io/claims/2629451-009) [empirical/evidenced] -- The study's hand-selected dataset covers all institutions that executed N/DPAs from 1993 to 2015, a population of 330 agreements, of which 94 involved publicly traded firms usable for stock price tests. > Our hand-selected dataset comprises all institutions that executed N/DPAs from 1993 to 2015 (N=330) and are publicly traded (N=94). Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-010](https://wulfkaal.github.io/claims/2629451-010) [empirical/evidenced] -- The U.S. financial corporations subject to N/DPAs collectively exceed $690 billion in market capitalization and more than $20 trillion in assets under management, making N/DPA governance intervention economically consequential. > The collective market capitalization of U.S. financial corporations that are subject to NDPAs exceeds $690 billion and exceeds over $20 trillion in assets under management (Copland 2012). Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-011](https://wulfkaal.github.io/claims/2629451-011) [empirical/asserted] -- This is the first study to examine stock price reactions to non- and deferred prosecution agreements, using all publicly available N/DPAs across several industries from 1993 to 2015 (N=330). > This is the first study that examines stock price reactions to N/DPAs. Our hand- selected dataset contains all publicly available N/DPAs in several industries from 1993 to 2015 (N=330). Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-012](https://wulfkaal.github.io/claims/2629451-012) [design/argued] -- The event study design is appropriate for N/DPAs because the wrongdoing event is identifiable through the execution of a reasonably standardized agreement and because information about the firm's wrongdoing can change the distribution of stock returns. > (1) the event of corporate wrongdoing is identifiable through N/DPAs execution and N/DPA executions are reasonably similar in format, (2) the information pertaining to N/DPA firm wrongdoing has the potential to change the distribution of stock returns, Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-015](https://wulfkaal.github.io/claims/2629451-015) [condition/asserted] -- Pre-announcement leaks about a pending N/DPA, including leaks by prosecutors, should not move markets significantly because leaked details carry no certainty or finality as to final terms or fine amount. > We assume that such leaks will not precipitate significant market movements as there is no certainty or finality as to the final terms of the NDPA and the amount of a fine. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-026](https://wulfkaal.github.io/claims/2629451-026) [empirical/evidenced] -- The data support Hypothesis 2: the market reacts positively at the DOJ announcement and at the start of the N/DPA term and negatively at the end of the term. > Figures 2 to 4a support Hypothesis 2: The market reacts positively at ANDPAE (E1a) and BNDPAT (E1b) and negatively at ENDPAT (E1c). Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-029](https://wulfkaal.github.io/claims/2629451-029) [empirical/evidenced] -- The data support Hypothesis 3: the market reacts positively when N/DPA governance changes become mandatory at the start of the term and negatively when they cease to be mandatory at its end. > Figures 3, 3a, 4, and 4a support Hypothesis 3: The market reacts positively at BNDPAT (E1b) and negatively at ENDPAT (E1c). Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-030](https://wulfkaal.github.io/claims/2629451-030) [mechanism/argued] -- The paired positive reaction at the start and negative reaction at the end of the N/DPA term is direct evidence that N/DPA mandated governance changes matter to investors. > We interpret the positive market reaction at BNDPAT and its negative reaction at ENDPAT as evidence that governance changes mandated by N/DPAs matter. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-032](https://wulfkaal.github.io/claims/2629451-032) [empirical/asserted] -- Market reaction to N/DPAs is industry specific, supporting the hypothesis that investors in some industries are more sensitive to N/DPA effects than investors in others. > We find industry-specific effects that support Hypothesis 4. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-033](https://wulfkaal.github.io/claims/2629451-033) [normative/argued] -- Because the market reacts positively both to N/DPA announcements and to the governance improvements taking effect, the DOJ's escalation of N/DPA executions beginning in 2002 could be justified on market value grounds. > The positive market reaction to announcements of N/DPAs and to N/DPA governance improvements at the beginning of the N/DPA term suggest that the DOJ's increase in N/DPA executions, starting in 2002, could be justified. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-036](https://wulfkaal.github.io/claims/2629451-036) [empirical/asserted] -- Despite wide-ranging criticism of N/DPAs on authority, fairness, and expertise grounds, scholars agree that N/DPAs do influence corporate governance. > Despite the broad critique of N/DPAs, consensus exists among scholars that N/DPAs influence corporate governance (Cunningham 2014b, Kaal and Lacine 2014, Coffee 2005, Thompson 2003). Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-037](https://wulfkaal.github.io/claims/2629451-037) [empirical/asserted] -- The existing literature has barely engaged the financial market implications of N/DPAs, which is the gap this study fills. > The literature has only marginally recognized the implications of N/DPAs for financial markets. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-039](https://wulfkaal.github.io/claims/2629451-039) [empirical/evidenced] -- Prior coding of all publicly available N/DPAs from 1993 to 2013 across more than 230 governance categories shows that N/DPAs have a substantial effect on corporate governance. > In the largest study to date, Kaal and Lacine (2014), using a hand-selected dataset comprising all publicly available N/DPAs from 1993-2013 (N=271) in over 230 governance categories, show a substantial effect of N/DPAs on corporate governance. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. 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