Amit Seru, an associate professor of finance at the University of Chicago Booth School of Business, has been named a co-recipient of the 2013 AQR Insight Award. It honors his research on how to identify and quantify misreported loans in the $2 trillion market for private mortgage-backed securities.

The award, sponsored by AQR Capital Management, recognizes unpublished research papers that provide the most significant, new practical insights for tax-exempt institutional or taxable investor portfolios.

Seru was honored for his paper “Asset Quality Misrepresentation by Financial Intermediaries: Evidence from the Residential Mortgage-backed Securities Market,” written with Tomasz Piskorski and James Witkin from Columbia Business School, who share the Distinguished Paper Award with Seru.

The distinguished paper designation means the authors received second place and will receive $40,000 of the $100,000 prize, with the remaining funds going to this year’s winner.

The winning research was conducted by Martin Lettau and Michael Weber from the Haas School of Business at the University of California at Berkeley, and Matteo Maggiori at New York University Stern School of Business, for their unpublished research in predicting market returns for currencies and other asset classes.

Bryan Kelly, an assistant professor of finance at Chicago Booth, won first prize in last year’s competition for research conducted jointly with Seth Pruitt, an economist at the Federal Reserve Board.

Though many academic finance papers are written each year, the AQR Insight Award is given to the research that best addresses the real-world challenges investors face in asset allocation, security selection, portfolio implementation, risk management and other areas, the company said.

Cliff Asness, managing principal at AQR, received a Chicago Booth MBA in 1991 and a PhD in 1994.

In their research, Seru, Piskorski and Witkin constructed two measures of misrepresentation of asset quality—misreported occupancy status of borrowers and misreported second liens—by comparing the characteristics of mortgages disclosed to the investors at the time of sale with actual characteristics of these loans at that time that are available in a dataset matched by a credit bureau. About 10 percent of mortgages sold by intermediaries from 2002 to 2007 contained false information, much of which could be traced to financial institutions. Investors then used that false information when pricing the assets.

Seru joined the Booth faculty in 2007 and concentrates his research on issues related to financial intermediation and regulation, interaction of internal organization of firms with financing and investment, and incentive provision in firms.

His papers have been published in the Quarterly Journal of Economics, the Journal of Finance, the Journal of Financial Economics and other scholarly publications. They have also been featured in The Wall Street Journal, The New York Times, Financial Times and The Economist.

Seru’s research on the behavior of banks and regulators during the housing crisis won the best paper award at the European Finance Association Conference, the Red Rock Conference, the CAF Research Conference, the NSIM Conference and the Mitsui Research Conference. t also won the biannual Chookaszian Endowed Risk Management Prize at Chicago Booth.

Seru teaches MBA courses in corporate finance.