SEC oversight of publicly listed firms ranges from comment letter (CL) reviews of firms' reporting compliance to pursuing enforcement actions against violators. Prior literature finds that firm political connections (PC) negatively predict enforcement actions, inferring SEC capture. We present new evidence that firm PC positively predict CL reviews and substantive characteristics of such reviews, including the number of issues evaluated and the seniority of SEC staff involved. These results, robust to identification concerns, are inconsistent with SEC capture and indicate a more nuanced relation between firm PC and SEC oversight than previously suggested.

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The media can impose reputational costs on firms because of its important role as an information intermediary and its ability to negatively slant coverage. We exploit a quasi-natural experiment that holds constant the information event across firms, but varies the availability of a major news outlet in local markets. We find that firms subject to the threat of slanted coverage suppress the release of negative information before the event and release it subsequently. Our results are consistent with theory on the active role firms can play in managing their reputational capital through anticipatory actions to avoid negative media coverage.

SEC oversight of publicly listed firms ranges from comment letter (CL) reviews of firms' reporting compliance to pursuing enforcement actions against violators. Prior literature finds that firm political connections (PC) negatively predict enforcement actions, inferring SEC capture. We present new evidence that firm PC positively predict CL reviews and substantive characteristics of such reviews, including the number of issues evaluated and the seniority of SEC staff involved. These results, robust to identification concerns, are inconsistent with SEC capture and indicate a more nuanced relation between firm PC and SEC oversight than previously suggested.

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We study the effects of visits by headquarters' managers on facility-level misconduct. These visits are central to monitoring, but are difficult to observe for a large sample of firms. We use the staggered introduction of airline routes to identify exogenous reductions in travel time between headquarters and facilities as our measure of visits and test whether the reductions affect misconduct. We find that for the at-risk sample travel-time reductions decrease the number of violations by 2% and penalties by 23.4%, suggesting that management focuses on reducing costlier violations as opposed to simply reducing the number of violations. These effects are concentrated in firms with weaker control systems, suggesting that strong controls can act as substitutes for visits. Furthermore, the introduction of broadband internet attenuates, but does not eliminate the effect of reductions on misconduct. Finally, we find that reductions result in greater misconduct when firms are subject to performance pressure.