Huntsman Post

Professor Who Impacted the Way Stocks Are Traded Comes to USU

By Steve Eaton

A professor long-recognized for financial market research which has led to key changes in trading on the New York Stock Exchange has agreed to become a Jon M. Huntsman Presidential Visiting Professor.

Hank Bessembinder, who graduated from the Huntsman School of Business in 1977 with a business major and an economics minor, plans to visit and conduct seminars for students and faculty in November, January, and February. A public lecture is planned for April 2012.

Dr. Bessembinder is also the A. Blaine Huntsman Chaired Presidential Professor at the Eccles School of Business at the University of Utah. He now serves as managing editor of the Journal of Financial and Quantitative Analysis, and he is an associate editor for two other journals. In all, he has an editing role in three of the top four journals in his field.

A recent study showed Dr. Bessembinder to be one of the most prolific authors in the top seven finance journals over the last 50 years, according to Tyler Bowles, the economics and finance department head at the Jon M. Huntsman School of Business.

Some of Dr. Bessembinder’s research focused on the way stocks are traded and led to the adoption of a more precise way of valuing stocks. Prior to 2000, stocks traded on the multiples of an eighth or a sixteenth of a dollar. In response to research by Dr. Bessembinder and others, the NYSE and NASDAQ markets reduced the multiples at which stocks trade to $0.01. His research has shown the markets performed better after the changes he and others recommended were implemented.

Dean Douglas D. Anderson said bringing such a well-known academic researcher, whose work has led to such significant changes, will benefit both faculty and staff at the Huntsman School of Business.

“Dr. Bessembinder’s top-level research has made him a sought-out consultant whose work has impacted the financial community for the better in several key areas,” Dean Anderson said. “We emphasize the importance of our students developing the skills they'll need to analyze data correctly so it can lead to better-informed decisions. Dr. Bessembinder’s respected research is an outstanding example of that being put into practice. We are proud he is an Aggie.”

Dr. Bessembinder said while he has never marketed his services as a consultant, he has been hired by major corporate and government entities such as Goldman Sachs, the New York Stock Exchange, the United States Department of Justice, the United States Securities and Exchange Commission, and the Attorney General of the State of New York.

“I’m proud to have been involved in a number of fairly important but, in many cases, behind-the-scenes investigations by government regulatory agencies,” he said. “I have ongoing consulting engagements with the Securities Exchange Commission, the Commodities Futures Trading Commission, and the Internal Revenue Service, among others.”

He said he has investigated certain aspects of trading behavior and, in a couple of cases, has gone to court to testify for the government.

“In some cases I’ve advised the government as it determined whether or not it wanted to bring charges,” he said. “I feel like I’m contributing something useful through that type of work.”

Dr. Bessembinder, who graduated in 1978 with his MBA from Washington State University and earned his doctorate at the University of Washington in 1986, said he is grateful for the opportunity to return to his alma mater and to teach as a visiting professor.

“I understand the Huntsman School of Business at Utah State is interested in advancing its research capabilities and research profile,” he said, “and I feel fortunate to be in a position where I might be able to nudge things along in the right direction.”

In 2009, Utah philanthropist Jon M. Huntsman announced he would fund two presidential chairs at the Huntsman School of Business. Well-known author, consultant and professor, Stephen R. Covey became the first Jon M. Huntsman Presidential Chair in Leadership in February 2010 and he continues today in that role as a research professor.

The other position has been filled by two visiting professors, so far, who have come and conducted intensive seminars for faculty and staff. Eytan Sheshinski, the Sir Isaac Wolfson Professor of Public Finance at Hebrew University in Jerusalem, became a Jon M. Huntsman Presidential Visiting Professor in February 2011. Miles Kimball, professor of economics at the University of Michigan, became the second Jon M. Huntsman Presidential Visiting Professor in May of 2011.