New Study Highlights Risks of Investing in Nevada-Based Companies
Tuesday, October 25, 2011 - 20:30
in Mathematics & Economics
According to a study recently released by University of Virginia Professors Michal Barzuza and David C. Smith, publicly held companies incorporated in Nevada are forced to restate their financial results--that is, amend flawed corporate financial reporting--at a rate 40 percent higher than the national average. Moreover, when such restatements occur, the market tends to punish Nevada-based companies far more harshly than it does companies incorporated in other states: Nevada companies that restate their financials experience a decline in stock price seven times greater than restating firms incorporated in other states.