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Corporate Fraud

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CEO-Director Connections and Corporate Fraud

N.K. Chidambaran Simi Kedia Nagpurnanand R. Prabhala

Working Paper

Copyright © 2010 by N.K. Chidambaran, Simi Kedia, and Nagpurnanand R. Prabhala Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holders. Copies of working papers are available from the authors.

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CEO-Director Connections and Corporate Fraud∗

N. K. Chidambaran

Simi Kedia

Nagpurnanand R. Prabhala

This Version: September 2010 JEL Classification: G30, G32, G34, G38

Chidambaran is at Fordham University (, Kedia is at Rutgers University (, and Prabhala is at the University of Maryland ( We thank Jonathan Karpoff and Jerry Martin for graciously sharing their data on frauds with us. We thank Benjamin Cole, Eli Fich, Shane Johnson, Lalitha Naveen, Howard Tuckman, Antoinette Schoar, Vijaya Venkatramani, Adam Yore, and seminar participants at Fordham University, London Business School, and 2010 Summer Research Conference at ISB for their comments. All errors remain ours. Chidambaran acknowledges support from a Fordham University Faculty Research Grant, Kedia acknowledges support from the Whitcomb Center, and Prabhala acknowledges support from the Center for Financial Policy, University of Maryland and the Judy Olian award for research support.

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CEO-Director Connections and Corporate Fraud
ABSTRACT We study the propensity of firms to commit financial fraud using a sample of SEC enforcement actions from 2000 to 2006. Controlling for year effects, Fama-French 48-industry...

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