It is my pleasure to offer a brief discussion of Garner, Hutchison, and Conover (2016; hereafter GHC) in this issue. GHC examine the stock price reaction of foreign private issuers (FPIs) cross-listed in the U.S. to the key events that lead to the passage of Sarbanes-Oxley Act (SOX) Section 407. It has two main findings: (1) FPIs experience a greater negative return in the U.S. market than the non-U.S.-traded stocks do in their respective domestic countries; (2) FPIs experience a greater negative return in the U.S. market than they do in their respective domestic countries. The two results appear similar but are derived from comparisons made against different benchmarks. In the first finding, the comparison is made between FPIs and non-U.S.-traded stocks, whereas in the second finding, the comparison is made between the stock returns of the FPIs in U.S. market versus those in their domestic countries. The two...
