This paper examines managerial disclosure behavior in mandatory filings in response to heightened legal accountability. We treat the enactment of the Sarbanes–Oxley Act (SOX) in 2002 as a regulatory event that increases the legal accountability of top executives and analyze the filing tones of a large sample of Forms 10-Q and 10-K from 1994 to 2017 using textual analysis. We find that changes in filing tones carry substantial information that is promptly reflected in the capital market. Furthermore, we identify a structural break in the distribution of filing tones around the passage of SOX. Firms tend to adopt a more negative tone in their quarterly mandatory disclosures following the enactment of SOX. Interestingly, investors exhibit a stronger reaction to changes in filing tone in the post-SOX era, which is not solely driven by the systematic shift in tone distribution. Additionally, we document that while filing tones are generally associated with common performance measures, this relationship weakens after SOX. These findings contribute to the understanding of how legal reforms shape managerial communication strategies and how market participants interpret soft information under regulatory scrutiny. By shedding light on disclosure behavior in response to increased legal accountability, this study offers timely implications for future legislative reforms, investor interpretation of corporate filings, and the broader governance of financial reporting.

This study investigates credit unions’ expansion into non-core lending and its association with risk and financial resilience. Using US credit union call report data from 1994 to 2024, we measure the share of purchased loans, lease receivables, and loans held for sale in non-core lending. We document robust conditional, within-credit-union associations that point to a clear risk trade-off. Credit unions with higher non-core exposure grow faster in terms of loans and membership but exhibit weaker financial buffers, including lower net worth ratios and weaker economic solvency, alongside higher delinquency. Decomposition tests indicate that loans held for sale are most strongly associated with adverse buffer and asset quality patterns, while purchased loans and lease receivables display smaller and less uniform relationships. Scale interactions suggest that these associations are generally weaker for larger institutions for both membership and assets. Post-COVID estimates indicate that the baseline relationships are broadly stable, while the growth link is becoming stronger.