This study examines the role of media coverage on meritorious shareholder litigation. Asserting a causal effect of the media on litigation is normally difficult due to the endogenous nature of media coverage. However, we use the Wall Street Journal’s backdating coverage to overcome these...

This study finds that large market-wide declines in stock prices are associated with higher litigation incidence and settlements even though market-wide events are legally irrelevant. The probability of litigation nearly doubles (from 0.29% to 0.55%), and the amount of settlements also doubles...

This study investigates whether the timely revelation of bad earnings news is associated with a lower incidence of litigation. The timeliness of earnings news is captured by a new measure based on the evolution of the consensus analyst earnings forecast. Holding total bad earnings news and other...