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 is the first comprehensive examination of the stock option backdating litigation. One reason why it is important to study the stock option backdating litigation is that it was a blend of financial reporting fraud and executive misappropriation of assets. Sometimes the executive...

We collect data on the record of every action in hundreds of derivative cases and merger class actions involving public companies filed in the Delaware Court of Chancery from 2004 to 2011. We use these data to analyze how markets respond to litigation in the most important court for corporate...

This paper adds to the stock option backdating literature by examining the litigation it spawned. The stock option backdating litigation ("SOBL"), compared to the contemporaneous typical financial reporting litigation, is negatively associated with auditor defendants, bankruptcy, and the amount...

We analyze class action litigation as a corporate governance device. Firms that have lower internal governance standards and those with fewer external monitors are more likely to be indicted. Lawsuits announcements are salient information to the market, as firms, on average, lose 12.3% without a...

Due to judicial decisions the stock market prices are deemed to be the lower value limit in determining the compensations within structural measures according to German stock corporation law (e.g. squeeze-out of minority stockholders). By applying other valuation methods, in particular the...

This study examines the spillover effect of securities litigation. Peers of the sued firm have negative three-day abnormal returns around case filings and continue underperforming over sixty trading days. Peers also improve financial reporting quality and change qualitative disclosure...

Dual-class stock creates a two-tiered ownership structure that allows new investors to buy a piece of a fast-growing company, with just one catch: they become second-class shareholders who have little or no voting power in the corporation. A rich literature debates whether this arrangement,...

The price reactions to corrective disclosures often serve as a benchmark for settlements in securities class action lawsuits. When the firm bears litigation costs, this benchmark creates a feedback effect that exacerbates the price reaction to news that contradicts managers' earlier reports....