Abstract (EN)

Our study of how stock market reacts to sanction announcements by the French financial regulator from 2004 to 2014 finds that market reacts negatively when a sanction is announced to the firm or in the press, but that market fails to react at the opening of proceedings for possible sanctions. Cross sectional regression models show that the penalties are too low to influence market reactions. Our results suggest that after the Financial Crisis of 2008, a plethora of news of financial wrongdoings have desensitized markets to announcements of sanctions against large companies