CFOs, CEOs That Like to Cheat On Ashley Madison Like to Cheat Investors: Study

by FEI Daily Staff

Corporate leaders that have used Ashley Madison -- the online dating service for marital affairs -- are more than twice as likely to engage in corporate cheating and misconduct, according to a new study.

“[Our] findings suggest a lack of dichotomy between personal and professional life, and cut against the common view that ethics are predominantly situational,” the research conducted by from academics at the University of Texas at Austin and Emory University. “Overall, our findings suggest that personal and professional ethics are closely related.”

There were 29 CEOs, 31 CFOs, and 104 other top executives who were Ashley Madison paid users during the 2008 to 2014 period, according to the study. Researchers used “hacked” credit card data from the Ashley Madison website that was made public following the August 2015 breach spearheaded by the group Impact Team.

The researchers then matched executives of U.S. publicly traded companies to the Ashley Madison database by name, mailing or email addresses. They then compared that to the companies that were subject of a non-dismissed securities class action lawsuit or engaged in a financial misstatement.

The study found that 9 percent of Ashley Madison CEO/CFOs faced a class action lawsuit during a specified period, compared to a 3 percent frequency for all other CEO/CFOs. Additionally, 7 percent of CEO/CFOs tied to the Ashley Madison service have a financial restatement compared to a 2 percent frequency for other firm years.

“Overall, 12 percent of AM CEO/CFO firm years have an infraction of some kind, compared to a 4 percent frequency for other firm-years” the study reveals. “These differences are all statistically significant with standard errors clustered by firm.”

“In contrast, we find no evidence that personal behavior of other executives is related to corporate misconduct, suggesting that our results are driven by CEO and CFO behavior rather than firm culture more generally,” the study adds.  “The findings support the classical view that virtues such as honesty and integrity influence a person’s thoughts and actions across diverse contexts.”