Covid, Work-from-Home, and Securities Misconduct

We consider whether traders are more likely to commit securities violations when trading at home, a new form of working induced by the Covid pandemic. We examine data pre- and post-Covid, when some traders were unexpectedly forced to work at home. The data indicate the presence of both a treatment and a selection effect, such that those working at home exhibit fewer misconduct cases. Work at home is associated with fewer cases of trading misconduct, although no difference in communications misconduct. The economic significance of working from home on trading misconduct is large for both the treatment and selection effects.