The Valuation Treadmill (Paperback or Softback)

Written by a leading expert on securities regulation, this book is a history of securities fraud regulation from the 1960s until the present.

Public companies now face constant pressure to meet investor expectations. The typical public company must continually deliver strong short-term performance every quarter to maintain its stock price. This valuation treadmill creates incentives for corporations to deceive investors. Published twenty years after the passage of Sarbanes-Oxley, which requires all public companies to invest in measures to ensure the accuracy of their disclosures, The Valuation Treadmill shows how securities fraud became a major regulatory concern. Drawing on case studies of paradigmatic securities enforcement actions involving Xerox, Penn Central, Apple, Enron, Citigroup, and General Electric, the book argues that corporate securities fraud emerged as investors increasingly valued companies based on their future performance. Corporations now have an incentive to issue unrealistically optimistic disclosure to convince markets that their success will continue. Securities regulation must do more to protect the integrity of public companies from the pressure of the valuation treadmill.

James J. Park is Professor of Law at UCLA School of Law. He writes and teaches in the areas of securities regulation and corporate law. He was an editor of Can Delaware Be Dethroned? Evaluating Delaware's Dominance of Corporate Law (with Iman Anabtawi, Stephen Bainbridge, & Sung Hui Kim, 2018).