Research: Lindner marketing professor finds current SEC disclosures insufficient
Tougher SEC disclosures needed to protect investors
University of Cincinnati Assistant Marketing Professor Noah Van Bergen, PhD, was part of the research team that recently uncovered that advertisements touting past performance exploit decision-making biases on the part of potential investors.
The study, titled “Fooled by Success: How, Why, and When Disclosures Fail or Work in Mutual Fund Ads,” was authored by Professors Joseph Johnson of the University of Miami Patti and Allan Herbert Business School; Gerard J. Tellis of the University of Southern California Marshall School of Business; and Van Bergen of UC's Carl H. Lindner College of Business.
“Ads that include the SEC’s current mandated disclosure are just as likely to mislead lay investors as those with no warning whatsoever,” said Van Bergen. “Essentially, the disclosures are ineffective at mitigating biases.”