Investing in Sin Pays

A recent paper says that investors gain 2.5% higher returns every year, on a risk-adjusted basis, by investing in "sin" stocks–publicly traded companies involved in alcohol, tobacco, and gaming–versus investing in stocks with comparable characteristics.

According to a press release, the study also found that there is a societal norm against funding operations that promote vice and that some institutional investors, such as pension plans, hold less of these stocks than other investors and miss out on the gains. In addition, “sin” stocks receive less analyst coverage than stocks with comparable characteristics.

“This research shows that social norms are important for economic outcomes and that they affect markets, including investment decisions, stock prices, and returns,” said NYU Stern Assistant Professor of Finance Marcin Kacperczyk, who co-authored the study paper with Harrison Hong from Princeton University.

Their paper, “The Price of Sin: The Effects of Social Norms on Markets,” is available here.

Proskauer Rose Law Firm Broadens Benefits Practice

A group of employee benefits lawyers led by Paul M. Hamburger have left McDermott Will & Emery’s Washington, D.C. office to establish the D.C. employee benefits practice of international law firm Proskauer Rose LLP.

A press release said the addition of Hamburger, Todd B. Castleton, Eugene M. Holmes, and James R. Napoli marks a significant step for the firm’s newly integrated Employee Benefits, Executive Compensation & ERISA Litigation Practice Center, which is approaching its 70-lawyer mark.

Hamburger has been practicing benefits law exclusively for more than 25 years, and has advised a number of Fortune 500 employers on all aspects of their employee benefit programs, particularly in connection with large M&A and other corporate transactions, according to the announcement. He is also an authority on COBRA and frequently represents his clients before government agencies such as the Internal Revenue Service, the U.S. Department of Labor, and the Pension Benefit Guaranty Corporation in connection with regulatory matters.

Castleton’s practice focuses on the compliance and administration of qualified defined contribution and defined benefit plans, nonqualified deferred compensation arrangements, and health and welfare plans. His background also includes experience with multiple employer, prototype, and volume submitter plans.

Holmes counsels clients in plan operation and governmental regulatory compliance. He also advises on the compensation and benefits plan ramifications and employer workforce impacts that result from corporate transactions, including mergers and acquisitions and reduction-in-force initiatives.

Napoli has an active ERISA practice and counsels clients on qualified defined contribution and defined benefit plans, nonqualified deferred compensation arrangements, and health and welfare plans. He also advises clients on ERISA and related litigation, as well as government compliance.

More information about Proskauer Rose LLP is available on their Web site: www.proskauer.com.

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