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We examine whether revealing misreporting affects the careers of executives and independent directors. To isolate the effects of revealing misreporting from the underlying malfeasance, we analyze executives and directors who joined firms after stock option backdating ceased, but who were in place to determine how the firm would respond to the unfolding backdating crisis. Overall, these new executives and directors faced career penalties at firms that issued a backdating restatement relative to those at firms that remained silent despite strong evidence of backdating having occurred. We conduct a variety of tests to rule out alternative explanations, and conclude that new executives and directors face career penalties after firms reveal misreporting.

This study examines how frequently firms restate when they materially misstate their financial statements using stock option backdating as the setting. Stock option backdating provides a unique opportunity to study this issue because it is possible to estimate misstatements with publicly available information to a high level of confidence, and the extensive media coverage of backdating notified boards of directors of the significant risk of misstatement. After identifying firms that materially misstated earnings due to stock option backdating with 95 percent (99 percent) probability, we find that only 11.5 percent (16.1 percent) of these firms subsequently restated. Restating firms are larger, have greater board independence, higher litigation risk and ROA, a lower market‐to‐book ratio, less discretionary accruals, and are more likely to have a CFO that was not involved in backdating. Restating firms are also more likely to disclose other adverse news, face securities litigation, and turn over the CFO than firms that appear to materially backdate but do not restate. Since nearly 9 of 10 firms failed to restate, our results give pause to researchers who use restatements as an indicator of misreporting, and to regulators who levy penalties on those who do self‐report. Faits relatifs a la communication d'information financiere erronee par les societes Les auteurs se demandent a quelle frequence les societes procedent a un retraitement lorsqu'il s'avere que leurs etats financiers contiennent des anomalies significatives, dans le contexte de l'antidatage des options sur actions. L'antidatage desdites options offre une occasion unique d’etudier cette question, etant donne qu'il est possible d'estimer les anomalies en s'appuyant sur des renseignements accessibles au public avec un degre eleve de fiabilite et que l'abondante couverture mediatique de l'antidatage a sensibilise les conseils d'administration a l'ampleur du risque d'anomalies. Apres avoir dresse l'inventaire des societes qui presentent des resultats comportant des anomalies significatives attribuables a l'antidatage des options sur actions a 95 pour cent (99 pour cent) de probabilite, les auteurs constatent que seulement 11,5 pour cent (16,1 pour cent) de ces societes ont subsequemment procede a un retraitement. Les societes qui procedent a des retraitements affichent les caracteristiques suivantes : taille plus importante, plus grande independance du conseil d'administration, risque de litige et rendement de l'actif plus eleves, ratio valeur de marche–valeur comptable plus faible, ajustements discretionnaires moins nombreux et directeur financier davantage susceptible de ne pas avoir pris part a l'operation d'antidatage. Les societes qui procedent a des retraitements sont egalement plus susceptibles de faire etat d'autres nouvelles negatives, d’etre exposees a des litiges en matiere de valeurs mobilieres et de changer de directeur financier que les societes qui, bien qu'elles semblent recourir abondamment a l'antidatage, s'abstiennent de retraiter leurs etats financiers. Puisque pres de neuf societes sur dix ne procedent a aucun retraitement, les resultats de l’etude donnent a reflechir aux chercheurs qui utilisent les retraitements comme indicateur de communication d'informations erronees et aux autorites de reglementation qui imposent des penalites aux societes optant pour l'autodeclaration.

This paper investigates whether a U.S. circuit court ruling that made it easier for public corporations to defend against security class actions led to more misreporting. In a difference-in-differences framework, I find an increase in restatements for firms affected by the ruling relative to unaffected firms. Further, within affected firms, these results are concentrated among those that experienced the lowest abnormal returns in response to the ruling, the firms most likely to face meritorious litigation, and among those firms that saw decreases (increases) in dedicated (transient) institutional ownership after the ruling. Inferences are similar examining cross-sectional tests in a levels framework. These results suggest that the threat of shareholder litigation can discipline managerial reporting practices and deter misreporting. As such, this evidence informs the debate about the role of securities class actions in regulating securities markets. This article is protected by copyright. All rights reserved.

This study examines whether the required disclosure of directors’ and officers’ (D&O) insurance premiums leads to nonmeritorious securities litigation. Our research setting uses a proprietary D&O insurance database that includes New York and non-New York firms, combined with the fact that New York firms must disclose D&O insurance premiums. We thus can exploit a natural experiment based on inter-state variation in disclosure regulation. Disclosed premiums may influence case selection in two ways. First, higher premiums signal higher limits, which plaintiffs’ lawyers likely believe enable higher settlements. Second, higher premiums indicate higher risk assessments from insurers and thus a higher likelihood that stock price drops signal misconduct rather than bad luck. We find that D&O insurance premiums for New York firms are associated with a higher dismissal rate. Offsetting this higher dismissal rate, plaintiffs’ lawyers can achieve higher settlements in the relatively few successful cases.

Category: Midfoot/Forefoot, Trauma Introduction/Purpose: Lisfranc injuries occurring between the medial cuneiform and base of the 2nd metatarsal require anatomic fixation. Suture button and screws are standard techniques for fixation, but the screw may decrease physiologic motion, whereas suture buttons may cause increased soft tissue irritation and iatrogenic cartilage damage. Potential benefits of the InternalBrace include physiologic motion, decreased iatrogenic damage, collagen ingrowth, limited bony erosion and decreased soft tissue irritation. In light of these potential benefits, no studies have investigated the biomechanical properties of the InternalBrace in a Lisfranc injury model. However, it is unknown whether there is significant difference in the biomechanical properties of the IB compared to the screw, or SB during load to failure, and cyclical loading. Methods: Three groups of sawbones were fixed together with either a 3.5 mm screw, SB, or IB, composed of a curved button, fibertape, and 4.75 mm biotenodesis screw. Sawbone constructs were held in a mechanical testing system (Model 809, MTS Systems Corp, Minneapolis MN). The first three groups of 10 were loaded in axial tension at 0.5mm/sec until failure to determine load-displacement data. Yield, stiffness, ultimate strength (US), yield energy, post-yield energy and ultimate strength energy were calculated. Three more groups of 8 constructs were loaded in-vitro at cyclical physiologic loads until displacement of 1.5 mm occurred. Constructs were first loaded for 10,000 cycles at 69 N (estimate for 50% body weight or assisted walking). Surviving specimens were loaded at 138 N (normal walk) for an additional 10,000 cycles and then 207 N (jog) for an additional 10,000 cycles. Displacement was recorded. The biomechanical properties were then compared between groups. Results: When loaded in axial tension at 0.5mm/sec until failure, the screw was found to be the stiffest construct (2,240 N/mm), while the InternalBrace (200 N/mm) was stiffer than the suture button (133 N/mm). Qualitatively, the InternalBrace was also found to hold load more consistently and for larger displacement prior to failure when compared to the suture button. Cyclic loading was performed with 10,000 cycles of 69 N, 138 N, and 207 N. The screw had the greatest resistance to fatigue. The InternalBrace maintained stiffness as well or better than the suture button, but the fatigue life was shorter than that of the suture button. Conclusion: To our knowledge, the biomechanical properties of the IB have not been compared to screw and SB for ligamentous lisfranc injuries. This study gives valuable information about the mechanical integrity of InternalBrace and supports continued use. However, further studies are warranted before making conclusions regarding early weight bearing.

This study finds that large marketwide declines in stock prices are associated with higher litigation incidence and settlements even though marketwide events are legally irrelevant. The probability of litigation nearly doubles (from 0.29% to 0.55%) and the amount of settlements also doubles (from $5.0 million to $10.1 million) when earnings disclosures occur during a large market decline, even after controlling for the firm’s market-adjusted return. Furthermore, judges with (without) specialized experience in securities litigation are more (less) likely to dismiss cases triggered by disclosures during large market declines. This pattern is consistent with experienced judges recognizing and dismissing weaker cases. Finally, managers are less likely to disclose adverse news at the end of trading days with large market declines. Although we cannot definitively identify the motive behind this pattern, it is consistent with managers recognizing increased litigation risk during large market declines. This paper was accepted by Mary Barth, accounting.

© 2018 Prof. PK Surendran Memorial Education Foundation Case: We describe a case of extensive symptomatic bilateral lipoma arborescens of the knee in a 19-year-old man who suffered from recurrent knee effusions for many years. This patient had MRI evidence of progression of disease prior to arthroscopic intervention. He was treated with bilateral complete arthroscopic synovectomies, demonstrating no evidence of cartilage wear. Conclusion: Lipoma arborescens is a progressive disease. Timely diagnosis and treatment may prevent disease evolution and sequela.

Because of previous data unavailability, it is unclear how important directors’ and officers’ (D&O) insurance is in securities fraud class action settlements. Using a unique data set of US D&O policies, we find that D&O insurance coverage is a less significant determinant of settlement amounts than estimated damages and proxies for the merits of cases. Limits on D&O insurance are related to settlements in only the weakest cases (those without allegations of accounting violations or institutional lead plaintiffs) where proxies for cases’ merits play a minimal role. Our findings suggest that most securities fraud class action settlements are meritorious and that accounting-related cases are a reasonable proxy for fraud.

Copyright © 2017 by the Journal of Bone and Joint Surgery, Incorporated. Sports hernia is a non-anatomic, non-diagnostic term that has been attributed to many different causes of groin pain.» Sports hernia is better described as pain localized anatomically to the inguinal region of an athlete without an actual hernia.» Nonoperative management including core stability while avoiding extreme hip range of motion should be attempted for at least 2 months prior to any operative intervention.» Associated pathology such as femoroacetabular impingement or adductor tear should be addressed.» If a sports hernia is not responsive to rehabilitation, referral to a general surgeon is appropriate.

We empirically examine the effect on independent directors’ careers of a firm’s decision to publicly investigate and reveal misbehavior. Using a sample of directors who joined boards after stock option backdating ceased, but before the scandal broke, we compare director career outcomes among firms that issued a restatement, announced a clean investigation and remained silent, despite strong evidence of backdating (“suspect backdating” firms). We find that director turnover, and votes withheld increased by 6% and 5% for directors at firms that restated relative to directors at suspect backdating firms. Further, we find limited benefit to directors if the firm publicly announced a backdating investigation that did not lead to a restatement. Overall, directors are penalized upon the revelation of misbehavior, do not benefit from publicly disclosed investigations that do not uncover misbehavior, and are not penalized for failing to act upon the inference of misbehavior. While these penalties could be rational, they may not create incentives for independent directors to monitor firms.

Background Juxtafacet cysts (JFCs) are a cause of back and radicular pain that can be treated conservatively and operatively. Such strategies include lumbosacral brace, epidural injection, open surgery, and minimally invasive surgery; although surgical treatment is usually reserved for unsuccessful conservative treatment. The role of minimally invasive surgery in athletic youth with JFCs has yet to be determined. Patients/Material and Methods The patient is a 16-year-old basketball player with a JFC. We performed endoscope-assisted cystectomy. Results Endoscope-assisted JFC excision immediately and completely resolved the patient's lower back and leg pain with no recurrence of symptoms 4 years after surgery. Conclusion We suggest that JFCs of the lumbar spine be a part of the differential diagnosis in young patients with back and radicular pain. Furthermore, we recommend that endoscope-assisted surgery be employed in the treatment of JFCs in young athletes.

Synovial sarcomas (SS) are soft tissue sarcomas with poor prognosis, displaying a lack of response to conventional cytotoxic chemotherapy. Although SS cell lines have moderate chemosensitivity to isofamide and doxorubicin therapy, the clinical prognosis is still poor. In this article, we showed that flavokawain B (FKB), a novel chalcone from kava extract, potently inhibits the growth of SS cell lines SYO-I and HS-SY-II through induction of apoptosis. Treatment with FKB increased caspase 8, 9, and 3/7 activity compared to vehicle-treated controls, indicating that both extrinsic and intrinsic apoptotic pathways were activated. Furthermore, FKB treatment of both cell lines resulted in increased mRNA and protein expression of death receptor-5 and the mitochondrial pro-apoptotic proteins Bim and Puma, while down-regulating the expression of an inhibitor of apoptosis, survivin in a dose-dependent manner. Our results suggest the natural compound FKB has a pro-apoptotic effect on SS cell lines. FKB may be a new chemotherapeutic strategy for patients with SS and deserves further investigation as a potential agent in the treatment of this malignancy.

Low back pain (LBP) is the most prevalent musculoskeletal complaint among professional and amateur golfers; however, associated radiological changes in golf-related LBP have not been examined in the literature. We suspect that Modic Type 1 changes in the lumbar spine are linked to golf-related LBP. In this retrospective case series, four middle-aged golfers (one professional and three high-level amateurs) presented to our clinic with LBP. Inflammation of the right side of endplates in the lumbar spine was suspected based on Modic Type 1 changes detected by magnetic resonance imaging (MRI) in each patient. All four cases were diagnosed with right-sided endplate inflammation and administered intradiscal steroid injections with a non-steroidal anti-inflammatory drug (NSAID). Treatment swiftly alleviated LBP and diminished Modic Type 1 changes on follow-up MRI 3-6 months later in all four patients. We suggest that Modic Type 1 changes play a significant role in the diagnosis and treatment of golf-related LBP. © 2010 The Author(s).

This study finds that large market-wide declines in stock prices are associated with higher litigation incidence and settlements even though market-wide events are legally irrelevant. The probability of litigation nearly doubles (from 0.29% to 0.55%), and the amount of settlements also doubles (from $5.0 million to $10.1 million) when earnings disclosures occur during a large market decline, even after controlling for the firm’s market-adjusted return. Further, judges with (without) specialized experience in securities litigation are more (less) likely to dismiss cases triggered by disclosures during large market declines. This pattern is consistent with experienced judges recognizing and dismissing weaker cases. Finally, managers are less likely to disclose adverse news at the end of trading days with large market declines. While we cannot definitively identify the motive behind this pattern, it is consistent with managers recognizing increased litigation risk during large market declines.

To extend earlier observations of germline E-cadherin mutations in kindreds with an inherited susceptibility to diffuse gastric cancer, we searched for germline E-cadherin mutations in five further families affected predominantly by diffuse gastric cancer and one family with a history of diffuse gastric cancer and early-onset breast cancer. Heterozygous inactivating mutations were found in the E-cadherin gene in each of these families. No mutation hotspots were identified. These results demonstrate that germline mutation of the E-cadherin gene is a common cause of hereditary diffuse gastric cancer and suggest a role for these mutations in the incidence of breast cancer. Hum Mutat 14:249–255, 1999. © 1999 Wiley-Liss, Inc.

The identification of genes predisposing to familial cancer is an essential step towards understanding the molecular events underlying tumorigenesis and is critical for the clinical management of affected families. Despite a declining incidence, gastric cancer remains a major cause of cancer death worldwide, and about 10% of cases show familial clustering. The relative contributions of inherited susceptibility and environmental effects to familial gastric cancer are poorly understood because little is known of the genetic events that predispose to gastric cancer. Here we describe the identification of the gene responsible for early-onset, histologically poorly differentiated, high grade, diffuse gastric cancer in a large kindred from New Zealand (Aotearoa). Genetic linkage analysis demonstrated significant linkage to markers flanking the gene for the calcium-dependent cell-adhesion protein E-cadherin. Sequencing of the E-cadherin gene revealed a G --> T nucleotide substitution in the donor splice consensus sequence of exon 7, leading to a truncated gene product. Diminished E-cadherin expression is associated with aggressive, poorly differentiated carcinomas. Underexpression of E-cadherin is a prognostic marker of poor clinical outcome in many tumour types, and restored expression of E-cadherin in tumour models can suppress the invasiveness of epithelial tumour cells. The role of E-cadherin in gastric cancer susceptibility was confirmed by identifying inactivating mutations in other gastric cancer families. In one family, a frameshift mutation was identified in exon 15, and in a second family a premature stop codon interrupted exon 13. These results describe, to our knowledge for the first time, a molecular basis for familial gastric cancer, and confirm the important role of E-cadherin mutations in cancer.

We examine the role of general counsel (GC) in firms' financial reporting quality. GCs have a broad oversight role within the firm, including keeping the firm in compliance with laws and regulations and dealing with potential violations with respect to financial reporting. Several high-profile U.S. Securities and Exchange Commission (SEC) investigations have resulted in lawsuits or indictments against GCs for perpetrating financial fraud and caused many to ask: where were the gatekeepers? As such, we examine the conditions under which GCs may stray from their primary role as gatekeepers. Mainly, we empirically investigate claims that compensation can impair the independence or compromise the professional judgment of a GC. We measure the level of compensation using the GC’s presence or absence in the top five officers of the firm by compensation. Results are consistent with GCs straying from their role as gatekeepers, to some extent, when highly compensated in a manner similar to the CEO and CFO. In particular, firms with highly compensated GCs have lower financial reporting quality and more aggressive accounting practices, including management of the litigation reserve. However, the results also show that highly compensated GCs play an important gatekeeping role in keeping the firm in compliance with generally accepted accounting principles. Thus, highly compensated GCs appear to tolerate moderately aggressive behavior but constrain it such that it would not result in violation of securities laws and jeopardize their standing within the firm. This paper was accepted by Mary Barth, accounting.

This paper investigates the effects on financial reporting practices of a court ruling that made it easier for public corporations to defend against class-action litigation filed under securities laws. I find an increase in restatements and discretionary revenues for firms affected by the ruling relative to unaffected firms. Further, within affected firms, these results were concentrated among those most likely to face litigation. I also find a decline in debt covenant violations and an increase in investment levels. These results suggest that the threat of shareholder litigation can discipline managerial reporting practices.

Synovial sarcomas (SS) are soft tissue sarcomas with poor prognosis, displaying a lack of response to conventional cytotoxic chemotherapy. Although SS cell lines have moderate chemosensitivity to isofamide and doxorubicin therapy, the clinical prognosis is still poor. In this article, we showed that flavokawain B (FKB), a novel chalcone from kava extract, potently inhibits the growth of SS cell lines SYO-I and HS-SY-II through induction of apoptosis. Treatment with FKB increased caspase 8, 9, and 3/7 activity compared to vehicle-treated controls, indicating that both extrinsic and intrinsic apoptotic pathways were activated. Furthermore, FKB treatment of both cell lines resulted in increased mRNA and protein expression of death receptor-5 and the mitochondrial pro-apoptotic proteins Bim and Puma, while down-regulating the expression of an inhibitor of apoptosis, survivin in a dose-dependent manner. Our results suggest the natural compound FKB has a pro-apoptotic effect on SS cell lines. FKB may be a new chemotherapeutic strategy for patients with SS and deserves further investigation as a potential agent in the treatment of this malignancy.

This study examines the role attorneys play on their firms’ voluntary disclosure policy. Our study is made possible by a unique dataset of corporate counsel employed by U.S. public corporations, which covers 25 percent of firms listed on Compustat (50 percent by total assets). We examine the relation between the number of attorneys a firm employs and the likelihood the firm issues a management earnings forecast, the number of forecasts issued, and the forecast error. We find that firms with more attorneys are less likely to issue management earnings forecasts, issue fewer forecasts, and forecast lower levels of earnings relative to actual earnings. These results hold even after controlling for the risk of litigation and considering endogeneity in the choice to hire attorneys. Our results suggest that attorneys play an important and under-researched role in firms' disclosure choices. As such, it is relevant to current debates about the role of corporate counsel in determining firm accounting choices.

Synovial sarcoma (SS) is a soft tissue sarcoma with poor prognosis and lack of response to conventional cytotoxic chemotherapy. The regulatory mechanisms for the rapid proliferation of synovial sarcoma poorly understood. Surgical resection with/without adjuvant radiotherapy and chemotherapy are the mainstay of treatment. Although the sarcoma cell lines have moderate chemosensitivity to isofamide and doxorubicin therapy, the overall prognosis is still poor. Therefore, further development of the treatment for SS is required. Kava is an ancient crop of the western Pacific. The root extract of kava has been served as a traditional beverage for Pacific Islanders. Consumption of this traditional beverage has been thought to be correlated with low and uncustomary sex ratios of cancer incidence in 3 kava-drinking countrites: Fiji, Vanuatu and Western Samoa. We have already reported that a kind of fravokawains from kava extracts (FKA: flavokawein A) induced apoptosis against bladder cancer cells, and flavokawein B (FKB) was also significant effective in inhibiting the growth of prostate cancer cells. In this study, we examined the inhibitory proliferation effects of the FKB in synovial sarcoma growth and whether FKB modulates tumor apoptosis cascades in human synovial sarcoma cell lines. We treated 2 cell lines of synovial sarcoma (SYO-I, HS-SY-II) by different concentrations of FKB (0, 2.5, 5.0, 7.5 μg/μl) for 24 hours. From the results of real time PCR, depending on the concentrations of FKB in both cell lines, the expression of Survivin was found to be decreased, while those of DR5, Puma, and Bim were increased. These results indicated that FKB effectively induces apoptosis of the two cell lines depending on the concentration. In conclusion, our findings demonstrate that FKB is effective for growth inhibition of synovial sarcoma cell lines in vitro and suggest that FKB may be a new therapeutic option for patients with synovial sarcoma. Citation Format: {Authors}. {Abstract title} [abstract]. In: Proceedings of the 102nd Annual Meeting of the American Association for Cancer Research; 2011 Apr 2-6; Orlando, FL. Philadelphia (PA): AACR; Cancer Res 2011;71(8 Suppl):Abstract nr 4241. doi:10.1158/1538-7445.AM2011-4241