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Yale Professor Ousted for Misconduct

Following allegations of financial misconduct amounting to $150,000, Florencio Lopez-de-Silanes, a former assistant professor at the John F. Kennedy School of Government, has resigned as the head of Yale University’s International Institute for Corporate Governance. The misconduct amounted to double billing travel expenses, according to the Wall Street Journal.

“I made a mistake and I deeply regret any unintended harm,” wrote Lopez-de- Silanes in a statement released to The Crimson by his lawyer, Peter E. Fleming III. “I am leaving Yale because it is the right thing to do for the Institute and all concerned.”

Until his resignation goes into effect at the end of June, Lopez-de-Silanes will be on unpaid leave, said Yale spokesman Tom Conroy, who declined to specify what sparked the investigations last September.

The star teacher was an assistant professor of public policy at the Kennedy School from 1994 to 2001 and received his Ph.D. in economics from Harvard University in 1993.

“He was a valued member of the faculty when he left,” said Kennedy School spokesman Molly Lanzarotta. “He left the school on good terms.”

Lopez-de-Silanes is the recipient of numerous awards, including Harvard’s Wells Prize in 1995 for the best dissertation in economics. In 2002 he was named one of the 100 Global Leaders for Tomorrow 2003 by the World Economic Forum.

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In the past Lopez-de-Silanes has worked closely with Harvard Jones Professor of Economics Andrei Shleifer, who was convicted in June of conspiring to defraud the U.S. government.

Lopez-de-Silanes’s specialty, corporate governance, has carried him as an adviser to countries across the world, including Mexico, his home country, Russia and Egypt. According to the Wall Street Journal, he “is known as a strong advocate of prompt disclosure of financial misdeeds.”

Douglas Rae, a professor of management at Yale, acknowledged that there was “some irony” in the situation, but said he thought it would have few implications for the reputation of corporate governance as a whole.

“I can offer no excuse except the intensity of my focus on my work,” wrote Lopez-de-Silanes.

Lopez-de-Silanes now faces an investigation of his work at the World Bank, where he has acted as a consultant on corporate governance issues, said World Bank spokesman Damian Milverton.

Speculation of the outcome was premature, he said, but in the past people who have been found guilty of financial misdemeanors have been disbarred from working further work with the bank either temporarily or for good.

—Staff writer Natalie I. Sherman can be reached at nsherman@fas.harvard.edu.

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