We study the influence of political partisanship in SEC investigations and AAER enforcement actions against financial misconduct. We find that the SEC is more likely to launch an investigation against a firm that is misaligned with the agency’s political ideology than other firms. The likelihood of an AAER appears unaffected by political misalignment, but once named in an AAER, a misaligned firm faces harsher penalties than other firms. We find evidence that collectively points to potential misallocation of scarce enforcement resources due to partisanship: conditional on investigation, misaligned firms are less likely to receive an enforcement action, and conditional on misreporting, non-misaligned firms are less likely to be investigated.

Ball and Brown (1968) introduce a method to measure accounting earnings’ contribution to price discovery toward the end-of-period price. Building on this method, we examine a comprehensive set of corporate disclosures and document a large gap in their contribution to annual price discovery between bad and good news years (40 percent versus over 60 percent), despite no such difference in stock return variance (partial R2). These patterns are consistent with managers proactively releasing good news to counteract negative news during bad news years. Our finding broadens the concept of news bundling from concurrent releases to intertemporal dynamics within an annual window. Voluntary press releases are a key driver of this disparity in price discovery, adding 3 percent in bad times while being the top contributor in good times (27 percent). Investor private information acquisition contributes to bridging the gap left by corporate disclosures in price discovery during bad news years. Data Availability: Data are available from public sources cited in the text.