Will SEC Quants Jump from Funds to Public Companies on Valuation Issues?

Thu Aug 13 09:52:28 EDT 2015
Raymund Wong and Dr. Jerry Arnold, with Nicolas Morgan

As the SEC applies greater scrutiny to the valuations that public companies assign to their assets, and as the tools that the SEC employs to detect aberrational valuations become more sophisticated, public company financial reporting, legal, and compliance personnel should familiarize themselves with the SEC’s more established approach to policing the valuation practices of other reporting entities. Much of the SEC’s enforcement efforts around valuation issues have occurred in the investment advisor area, but the methods employed there have direct applicability for public companies. This paper by NERA Senior Consultant Raymund Wong, Academic Affiliate Dr. Jerry Arnold, and Zaccaro Morgan Founding Partner Nicolas Morgan examines the SEC’s approach to generating public company reporting cases: task force-based, quantitative-driven tools to examine public company financial reporting issues and bring valuation actions against these companies.