{"id":{"repo_id":"uiuc","oai_identifier":"oai:www.ideals.illinois.edu:2142/129514"},"canonical_url":"https://search.dev.ndltd.org/etd/uiuc/oai:www.ideals.illinois.edu:2142/129514","repository":{"repo_id":"uiuc","name":"University of Illinois - Urbana-Champaign","base_url":"https://www.ideals.illinois.edu/oai-pmh"},"display":{"title":"Essays on finance","abstract":"Submission published under a 24 month embargo labeled 'U of I Access', the embargo will last until 2027-05-01","abstract_html":"Submission published under a 24 month embargo labeled 'U of I Access', the embargo will last until 2027-05-01","abstract_has_math":false,"creators":["Lee, Jae Jin"],"institution":"University of Illinois Urbana-Champaign","degree_name":"Ph.D.","degree_level":"Dissertation","degree_discipline":"Finance","degree_department":null,"school":null,"contributors":["Zeume, Stefan","Almeida, Heitor","Pollet, Joshua","Choi, Jaewon"],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2025,"date_issued":"2025-04-08","date_published":"2025-04-08","updated_at":"2026-07-22T22:25:05Z","subjects":["Institutional Investor","Financial Misconduct"],"languages":["en","eng"],"rights":["Copyright 2025 Jae Jin Lee"],"rights_urls":[],"identifier_entries":[]},"links":{"outbound_url":"https://hdl.handle.net/2142/129514","outbound_label":"Handle","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor","label":"Contributor","values":["Zeume, Stefan","Almeida, Heitor","Pollet, Joshua","Choi, Jaewon"]},{"key":"dc:creator","label":"Author","values":["Lee, Jae Jin"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date","label":"Dc Date","values":["2025-04-08","2025-05"]},{"key":"dc:type","label":"Dc Type","values":["text","Thesis"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Finance"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Dissertation"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph.D."]},{"key":"thesis:institution_name","label":"Thesis Institution Name","values":["University of Illinois Urbana-Champaign"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["Institutional Investor","Financial Misconduct"]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:language","label":"Dc Language","values":["en","eng"]},{"key":"dc:rights","label":"Dc Rights","values":["Copyright 2025 Jae Jin Lee"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["https://hdl.handle.net/2142/129514"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description","label":"Description","values":["Submission published under a 24 month embargo labeled 'U of I Access', the embargo will last until 2027-05-01","The student, Jae Jin Lee, accepted the attached license on 2025-04-07 at 10:55.","The student, Jae Jin Lee, submitted this Dissertation for approval on 2025-04-07 at 10:56.","This Dissertation was approved for publication on 2025-04-08 at 11:43.","DSpace SAF Submission Ingestion Package generated from Vireo submission #21718 on 2025-10-19 at 19:14:32","My dissertation focuses on the effects of misconduct in financial institutions. The first chapter examines how political connections influence the investment decisions of public pension funds, and the next two chapters investigate how the revelation of financial advisory misconduct affects affiliated banks and the portfolio management of mutual funds. The first chapter investigates how political connections influence public pension funds' investment decisions and performance in private equity markets. Exploiting quasi-random electoral outcomes from a sample of close U.S. state elections, I find that private equity firms donating to winning candidates who become pension board members are about ten times more likely to receive postelection investments from the pension fund than firms donating to losing candidates. Additionally, private equity funds in which public pension funds invest through political connections exhibit about five percentage points lower abnormal internal rate of return, driven partly by abnormal fund fees and home-biased investments. The second chapter examines how the revelation of financial advisory misconduct affect the deposits of their affiliated banks. Exploiting detailed administrative data on financial advisors and the geographic dispersion of bank branches, I find that, after advisory misconduct is exposed in a county, their affiliated bank branches in that county show abnormal decreases in deposits and small business loan originations. These effects are stronger when banks are geographically closer to affiliated advisors, face serious misconduct, have more uninsured deposits, are affiliated with advisors serving fewer retail clients, or are in socially-networked counties. I establish causality through the quasi-natural experiment of the mutual fund late-trading scandal. The results indicate that there are unexplored inter-industry distrust spillovers across financial intermediaries. Finally, the third chapter explores how business ties with portfolio firms affect the asset management strategies of mutual funds. By exploiting the revelation of mutual fund advisory misconduct as an exogenous shock to these business ties, I find that mutual fund management firms with collapsed trust tend to increase their portfolio weights in client stocks following the misconduct revelation. This shift towards client stocks effectively reduces the likelihood of business partnership termination. Additionally, I find that client stocks underperform compared to non-client stocks and exhibit indifference towards net-selling stocks held by the same mutual fund families. These findings raise concerns about fiduciary duty violations and underscore the need for vigilance in aligning investment decisions with shareholder interests."]},{"key":"dc:format","label":"Dc Format","values":["application/pdf"]},{"key":"dc:title","label":"Title","values":["Essays on finance"]}]}],"canonical_facts":{"dc:contributor":["Zeume, Stefan","Almeida, Heitor","Pollet, Joshua","Choi, Jaewon"],"dc:creator":["Lee, Jae Jin"],"dc:date":["2025-04-08","2025-05"],"dc:description":["Submission published under a 24 month embargo labeled 'U of I Access', the embargo will last until 2027-05-01","The student, Jae Jin Lee, accepted the attached license on 2025-04-07 at 10:55.","The student, Jae Jin Lee, submitted this Dissertation for approval on 2025-04-07 at 10:56.","This Dissertation was approved for publication on 2025-04-08 at 11:43.","DSpace SAF Submission Ingestion Package generated from Vireo submission #21718 on 2025-10-19 at 19:14:32","My dissertation focuses on the effects of misconduct in financial institutions. The first chapter examines how political connections influence the investment decisions of public pension funds, and the next two chapters investigate how the revelation of financial advisory misconduct affects affiliated banks and the portfolio management of mutual funds. The first chapter investigates how political connections influence public pension funds' investment decisions and performance in private equity markets. Exploiting quasi-random electoral outcomes from a sample of close U.S. state elections, I find that private equity firms donating to winning candidates who become pension board members are about ten times more likely to receive postelection investments from the pension fund than firms donating to losing candidates. Additionally, private equity funds in which public pension funds invest through political connections exhibit about five percentage points lower abnormal internal rate of return, driven partly by abnormal fund fees and home-biased investments. The second chapter examines how the revelation of financial advisory misconduct affect the deposits of their affiliated banks. Exploiting detailed administrative data on financial advisors and the geographic dispersion of bank branches, I find that, after advisory misconduct is exposed in a county, their affiliated bank branches in that county show abnormal decreases in deposits and small business loan originations. These effects are stronger when banks are geographically closer to affiliated advisors, face serious misconduct, have more uninsured deposits, are affiliated with advisors serving fewer retail clients, or are in socially-networked counties. I establish causality through the quasi-natural experiment of the mutual fund late-trading scandal. The results indicate that there are unexplored inter-industry distrust spillovers across financial intermediaries. Finally, the third chapter explores how business ties with portfolio firms affect the asset management strategies of mutual funds. By exploiting the revelation of mutual fund advisory misconduct as an exogenous shock to these business ties, I find that mutual fund management firms with collapsed trust tend to increase their portfolio weights in client stocks following the misconduct revelation. This shift towards client stocks effectively reduces the likelihood of business partnership termination. Additionally, I find that client stocks underperform compared to non-client stocks and exhibit indifference towards net-selling stocks held by the same mutual fund families. These findings raise concerns about fiduciary duty violations and underscore the need for vigilance in aligning investment decisions with shareholder interests."],"dc:format":["application/pdf"],"dc:identifier":["https://hdl.handle.net/2142/129514"],"dc:language":["en","eng"],"dc:rights":["Copyright 2025 Jae Jin Lee"],"dc:subject":["Institutional Investor","Financial Misconduct"],"dc:title":["Essays on finance"],"dc:type":["text","Thesis"],"thesis:degree_discipline":["Finance"],"thesis:degree_level":["Dissertation"],"thesis:degree_name":["Ph.D."],"thesis:institution_name":["University of Illinois Urbana-Champaign"]},"updated_at":"2026-07-22T22:25:05Z"}