Is the SEC captured? Evidence from comment-letter reviews

Jonas Heese, Mozaffar Khan, Karthik Ramanna

Research output: Contribution to journalArticlepeer-review

68 Scopus citations


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.

Original languageEnglish (US)
Pages (from-to)98-122
Number of pages25
JournalJournal of Accounting and Economics
Issue number1
StatePublished - Aug 2017

Bibliographical note

Funding Information:
We thank Wayne Guay (editor), Terrence Blackburne (reviewer), and workshop participants at Dartmouth, Harvard, IESE, Maastricht, Oulu, and Washington for helpful comments, Bret Johnson for insights into the comment-letter review process, and Xiaonan Qin for excellent research assistance. Ramanna thanks the Charles Koch Foundation for partial funding on this project. Appendix A


  • Comment letters
  • Political connections
  • Regulatory capture
  • SEC enforcement


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