Few studies have examined public response to unethical or illegal behavior by firms, despite some research on institutional investors, organized protest groups or shareholder activists. Although a robust research literature shows that corporations invest heavily in impression management the relevant audiences for these messages have generally been construed by scholars as other organizations, obscuring the micro-foundations of market activity. This paper will address the knowledge gap by drawing on evidence from a long term field study of retail investors. Based on their responses to firms’ misconduct before and after the corporate fraud scandals of the twentieth century, this paper will extend current theoretical models by combining the micro level of analysis with considerations of historical context. The latter is particularly important in explaining how the evaluative standards applied to corporations change over time, from reputation-based assessments to those based on legitimacy.