In American legal discourse, many commentators believe that the best way to deter securities fraud is the class action, despite its serious side effect: frivolous litigation. A comparative study of securities fraud in Japan, which had an identical securities code addressing securities fraud with the U.S. before the adoption of class action, however, presents a different story.

This article demonstrates that a regulatory regime such as Japan’s – that does not rely on class actions but instead empowers public enforcement – can make the sanctioned fraud companies suffered substantial reputational cost. As the first comprehensive empirical study of fraudulent disclosure enforcement in Japan, this paper accounts for every securities fraud case that has resulted in sanctions by the Securities Exchange and Surveillance Committee (SESC) until 2018 as a sample. The paper divides a typical Japanese securities fraud scandal into eight stages for analytical purposes and uses event study methodology to measure market reaction to the disclosure of irregularities. The empirical results reveal that securities fraud scandals cause affected companies to lose a substantial portion of their market value under this legal regime. In particular, companies lose around 12% of their market value immediately after they issue a typically vague statement about a potential financial irregularity problem. Also, the magnitude of the market reaction to this statement appears to be an accurate predictor of the seriousness of the scandal, which negatively associates with the holdings of shares owned by the CEO.

在美国的法律讨论中，许多评论员认为，阻止证券欺诈的最佳方法是集体诉讼，尽管它具有严重的副作用：琐碎的诉讼。对日本证券欺诈的比较研究发现，在采用集体诉讼之前，它与美国针对证券欺诈具有相同的证券代码，但事实却截然不同。

本文证明，诸如日本这样的监管制度（不依赖集体诉讼，而是赋予公共执法权）可以使受制裁的欺诈公司蒙受巨大的声誉损失。作为日本对欺诈性披露执法的首次全面实证研究，本文以直到2018年之前受到证券交易和监视委员会（SESC）制裁的每起证券欺诈案件为例。本文将典型的日本证券欺诈丑闻分为八个阶段进行分析，并使用事件研究方法来衡量市场对违规披露的反应。实证结果表明，在这种法律制度下，证券欺诈丑闻使受影响的公司损失了相当一部分市场价值。尤其是，在发布关于潜在财务违规问题的通常含糊的声明后，公司立即损失了大约12％的市值。同样，市场对该声明的反应程度似乎是丑闻严重性的准确预测指标，该丑闻与首席执行官所持股份负相关。