Contact information

Parham Holakouee
+1 (310) 963-5634


“Deregulated Securities Markets, Lax Corporate Governance, and Corruption: Evidence From The Nevada OTC Experiment.” Job Market Paper.

Can we rely on retail investors in lightly regulated markets to discipline the corporate governance decisions of firm managers? Publicly traded firms in the over-the-counter (“OTC”) markets operate in relative opacity, avoiding the federal disclosure laws and listing requirements demanded of firms on formal U.S. exchanges (e.g. NYSE, Nasdaq). How do firms in this weakly regulated marketplace respond to the option of a lax legal regime? Nevada amended its corporate law in 2001, effectively removing director and officer liability for breaches of well-established corporate fiduciary duties. This Nevada amendment is concurrent with a surge in the proportion of OTC firms incorporating in Nevada: 16% before 2001 vs. 59% after 2001. The extant literature on the impact of this legal change has focused solely on the major exchanges where Nevada incorporations have increased by 20%; the more striking rise in the OTC has been overlooked.

This paper examines the rise of Nevada incorporations in the OTC. I empirically analyze Nevada-incorporated firms using a differences-in-differences empirical design with a novel, hand-collected dataset of SEC Trading Suspensions as my outcome variable. I find strong statistically and economically significant evidence that firms choosing post-2001 Nevada corporate law are the firms most likely to be engaging in corporate misconduct.

Because the OTC markets lack the disclosure requirements and regulatory constraints that protect investors on the national exchanges—and with OTC markets already a haven for insider abuse—Nevada’s lax corporate law may be removing a key deterrent to corporate corruption where it is needed most.


“Broad-Based Stock Option Compensation as a Labor Sorting Mechanism.” Work in Progress.

“Behavioral Biases and Contest Theory.” Work in Progress.

“Differentiation via Corporate Social Responsibility: An Empirical Examination of Pro-Social Behavior in Highly Concentrated Industries.” Work in Progress.


University of California, Berkeley
Haas School of Business
Spring 2016
UGBA 101B, Macroeconomic Analysis for Business Decisions
Graduate Student Instructor

University of California, Berkeley
Haas School of Business
Spring 2013, Spring 2014, and Spring 2015
MBA 299, Strategy
Graduate Student Instructor
Outstanding Graduate Student Instructor Award

University of California, Berkeley
Haas School of Business
Fall 2014
UGBA 101A, Microeconomic Analysis for Business Decisions
Graduate Student Instructor

University of California, Los Angeles
UCLA School of Law
Spring 2010
Law 235, Business Strategy for Lawyers
Graduate Student Instructor

Research & Teaching Interests

Primary Interests: Contracts, Corporate Governance, Securities Regulation, Business Associations, Law and Economics, Behavioral Law and Economics.

Additional Interests: Torts, Negotiation, Corporate Finance, Empirical Legal Studies, Antitrust, Contract Theory, Business Ethics.