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Description
The PPP Loan Program was created by the CARES Act and carried out by the Small Business Administration (SBA) to provide support to small businesses in maintaining their payroll during the Coronavirus pandemic. This program was approved for $350 billion, but this amount was expanded by an additional $320 billion to meet the demand by struggling businesses, since initial funding was exhausted under two weeks.<br/><br/>Significant controversy surrounds the program. In December 2020, the Department of Justice reported 90 individuals were charged for fraudulent use of funds, totaling $250 million. The loans, which were intended for small business, were actually approved for 450 public companies. Furthermore, the methods of approval are<br/>shrouded in mystery. In an effort to be transparent, the SBA has released information about loan recipients. Conveniently, the SBA has released information of all recipients. Detailed information was released for 661,218 recipients who have received a PPP loan in excess of $150,000. These recipients are the central point of this research.<br/><br/>This research sought to answer two primary questions: how did the SBA determine which loans, and therefore which industries are approved, and did the industries most affected by the pandemic receive the most in PPP loans, as intended by Congress? It was determined that, generally, PPP Loans were approved on the basis of employment percentages relative to the individual state. Furthermore, in general, the loans approved were approved fairly, with respect to the size of the industry. The loans, when adjusted for GDP and Employment factors, yielded a clear ranking that prioritized vulnerable industries first.<br/><br/>However, significant questions remain. The effectiveness of the PPP has been hindered by unclear incentives and negative outcomes, characterized by a government program that has essentially been rushed into service. Furthermore, limitations of available data to regress and compare the SBA's approved loans are not representative of small business.
ContributorsMaglanoc, Julian (Author) / Kenchington, David (Thesis director) / Cassidy, Nancy (Committee member) / Department of Finance (Contributor) / Dean, W.P. Carey School of Business (Contributor) / School of Accountancy (Contributor) / Barrett, The Honors College (Contributor)
Created2021-05
Description
In this thesis, we analyze the case, Swain, et al. v. Bixby Village, et al., the Ahwatukee Lakes Golf Course case, and the legal findings surrounding it. First, this thesis examines the history of the case and its ongoing litigation. Next, the background information on select definitions and other related cases is examined. Finally, this thesis analyzes three main points addressed in the Appellate Court’s Opinion on the case and presents potential next steps and recommendations for an equitable solution on both sides of this and future cases concerning land restricted to golf course use.
ContributorsEngler, Joelle Samantha (Co-author) / Asher, Rebecca (Co-author) / Gammage, Grady (Thesis director) / Stapp, Mark (Committee member) / Cassidy, Delilah (Committee member) / Historical, Philosophical & Religious Studies (Contributor) / School of Accountancy (Contributor) / Department of Economics (Contributor) / Barrett, The Honors College (Contributor)
Created2020-05
Description
The purpose of this paper is to review the effects of the Dodd-Frank Title VII Clearing Regulations on the Over-the-counter (OTC) derivatives market and to analyze if the benefits of the Title VII regulations have outweighed the costs in the OTC derivatives market by reducing systematic(market) risk and protecting market participants or if the Title VII regulations’ costs have made things worse by lessening opportunities in the OTC derivatives market and stifling economics benefits by over regulating the market. This paper strives to examine this issue by explaining how OTC are said to have played a part in the 2008 Financial crisis. Next, we give a general overview of financial securities, and what OTC are. Then we will give a general overview of what the Dodd-Frank Wall Street Reform and Consumer Protection Acts are, which are the regulations to come out of the 2008 Financial crisis. Then the paper will dive into Dodd-Frank Title VII Clearing Regulations and how they regulated OTC derivatives in the aftermath of the 2008 Financial crisis. Next, we discuss the Clearing House industry. Then the paper explores the major change of central clearing versus the previous bilateral clearing system. The paper will then cover how these rules have affected OTC derivatives market by examining the works of authors, who both support the regulations and others, who oppose the regulations by looking at logical arguments, historical evidence, and empirical evidence. Finally, we conclude that based on all the evidence how the Dodd-Frank Title VII Clearing Regulations effects on the OTC derivatives market are inconclusive at this time.
ContributorsCharette, John (Co-author) / Thacker, Harshit (Co-author) / Aragon, George (Thesis director) / Stein, Luke (Committee member) / Department of Finance (Contributor) / Department of Economics (Contributor) / Dean, W.P. Carey School of Business (Contributor) / Department of Information Systems (Contributor) / School of Accountancy (Contributor) / Barrett, The Honors College (Contributor)
Created2019-05
Description
Executive compensation is broken into two parts: one fixed and one variable. The fixed component of executive compensation is the annual salary and the variable components are performance-based incentives. Clawback provisions of executive compensation are designed to require executives to return performance-based, variable compensation that was erroneously awarded in the year of a misstatement. This research shows the need for the use of a new clawback provision that combines aspects of the two currently in regulation. In our current federal regulation, there are two clawback provisions in play: Section 304 of Sarbanes-Oxley and section 954 of The Dodd\u2014Frank Wall Street Reform and Consumer Protection Act. This paper argues for the use of an optimal clawback provision that combines aspects of both the current SOX provision and the Dodd-Frank provision, by integrating the principles of loss aversion and narcissism. These two factors are important to consider when designing a clawback provision, as it is generally accepted that average individuals are loss averse and executives are becoming increasingly narcissistic. Therefore, when attempting to mitigate the risk of a leader keeping erroneously awarded executive compensation, the decision making factors of narcissism and loss aversion must be taken into account. Additionally, this paper predicts how compensation structures will shift post-implementation. Through a survey analyzing the level of both loss- aversion and narcissism in respondents, the research question justifies the principle that people are loss averse and that a subset of the population show narcissistic tendencies. Both loss aversion and narcissism drove the results to suggest there are benefits to both clawback provisions and that a new provision that combines elements of both is most beneficial in mitigating the risk of executives receiving erroneously awarded compensation. I concluded the most optimal clawback provision is mandatory for all public companies (Dodd-Frank), targets all executives (Dodd-Frank), and requires the recuperation of the entire bonus, not just that which was in excess of what should have been received (SOX).
ContributorsLarscheid, Elizabeth (Author) / Samuelson, Melissa (Thesis director) / Casas-Arce, Pablo (Committee member) / WPC Graduate Programs (Contributor) / School of Accountancy (Contributor) / Barrett, The Honors College (Contributor)
Created2018-12
Description
Given its impact on the accounting profession and public corporations, Sarbanes-Oxley Act of 2002(SOX) is a widely researched regulation among accounting scholars. Research typically focuses on the impact it has had on corporations, executives and auditors, however, there is limited research that illustrates the impact SOX may have on average Americans. There were several US criminal code sections that resulted from the passing of SOX. Statute 1519, which is often referred to as the "anti-shredding provision", penalizes anyone who "knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to" obstruct a current or foreseeable federal investigation. This statute, although intended to punish behavior similar to that which occurred in the early 2000s by corporations and auditors, has been used to charge people beyond its original intent. Several issues with the crafting of the statute cause its broad application and some litigation even reached the Supreme Court due to its vague wording. Not only is the statute being applied beyond the intent, there are other issues that legal scholars have critiqued it for. This statute is far from being the only law facing these issues as the same issues and critiques are found in the 14th amendment. Rewriting the statute seems to be the most effective way to address the concerns of judges, lawyers and defendants regarding the statute. In addition, Congress could have passed this statute outside of SOX to avoid being seen as overreaching if obstruction of justice related to documents was actually an issue outside of corporate fraud.
ContributorsGonzalez, Joana (Author) / Samuelson, Melissa (Thesis director) / Lowe, Jordan (Committee member) / School of Accountancy (Contributor) / Barrett, The Honors College (Contributor)
Created2016-12
Description
For decades, firms and individuals have utilized written documents to aid in the negotiation of, and completion of, business transactions. One such document is known as a "letter of intent." A letter of intent is often in the form of a letter that serves to evidence preliminary discussions and aid in negotiations between parties. They are generally intended to be "non-binding," meaning neither party will be bound by terms or conditions set forth in the letter of intent unless formal documents are later prepared and executed by the parties. Letters of intent take myriad forms and names, such as "memorandum of understanding," "proposal letter," and "letter of interest." They have been used in many areas of business, including finance, real estate, and supply chain management. Parties often choose to use a letter of intent for varied benefits it may provide, memorializing preliminary discussions, establishing a timeline for negotiations, seeing whether there are any "deal breakers" among terms being proposed, confirming that a party is serious about a deal, or putting moral pressure on the other party to continue negotiations. However, letters of intent carry with them a significant level of risk, which raises the question of whether or not they should be used at all. Many of the risks associated with the use of a letter of intent stems from the potential for a court to find that a letter of intent constitutes a binding agreement, or creates a duty of the parties to continue negotiations in good faith. Parties to a letter of intent may later disagree as to whether they intended all of the terms, or a particular provision, to be legally binding and enforceable, resulting in legal action. Even if a court finds that a letter of intent does not constitute a binding contract, a party may be able to recover damages under a number of legal theories, such as breach of a duty to negotiate in good faith or promissory estoppel. The use of letters of intent is therefore risky, and ultimately, the risks may outweigh the benefits of utilizing letters of intent. This thesis studies the types, uses, benefits, and risks associated with the use of letters of intent, including an examination of statutes and cases that have been applied by courts in disputes surrounding their use. Ways to mitigate the risks of use are also examined including simple practices such as not signing a letter of intent and using a separate document for any terms which must be binding, such as a "no shop" clause. A proposed legislative solution is also discussed that would prevent letters of intent not explicitly intended to be binding and meeting statutory requirements from being enforced in court, thereby substantially reducing the risks associated with the use of letters of intent.
ContributorsGilman, Alexander James (Author) / Birnbaum, Gary (Thesis director) / Stein, Luke (Committee member) / Claus, Scot (Committee member) / Department of Finance (Contributor) / W. P. Carey School of Business (Contributor) / Sandra Day O'Connor College of Law (Contributor) / Department of Supply Chain Management (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05