Topic
Class action
About: Class action is a research topic. Over the lifetime, 2100 publications have been published within this topic receiving 16373 citations. The topic is also known as: class suit & representative action.
Papers published on a yearly basis
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Papers
TL;DR: This article investigated the reputational impact of financial fraud for outside directors based on a sample of firms facing shareholder class action lawsuits and found that outside directors do not face abnormal turnover on the board of the sued firm but experience a significant decline in other board seats held.
556 citations
TL;DR: The authors found that shareholders partially anticipate these lawsuits based on lawsuit filings against other firms in the same industry and capitalize part of these losses prior to a lawsuit filing date, and that such an understatement is greater for firms with a higher likelihood of being sued.
Abstract: This paper documents significantly negative stock price reactions to shareholder-initiated class action lawsuits. We find that shareholders partially anticipate these lawsuits based on lawsuit filings against other firms in the same industry and capitalize part of these losses prior to a lawsuit filing date. We show that the more likely a firm is to be sued, the larger the partial anticipation effect (shareholder losses capitalized prior to a lawsuit filing date) and the smaller the filing date effect (shareholder losses measured on the lawsuit filing date). Our evidence suggests that previous research that typically focuses on the filing date effect understates the magnitude of shareholder losses, and that such an understatement is greater for firms with a higher likelihood of being sued.
343 citations
TL;DR: In this paper, the authors examine the impact of executive compensation on private securities litigation and find that incentive pay in the form of options increases the probability of securities class action litigation, holding constant a wide range of firm characteristics.
Abstract: The paper examines the impact of executive compensation on private securities litigation. We find that incentive pay in the form of options increases the probability of securities class action litigation, holding constant a wide range of firm characteristics. We further document that there is abnormal upward earnings manipulation during litigation class periods and that insiders exercise more options and sell more shares during class periods, but that this activity is largely driven by pre-existing option holdings of the managers. Our results suggest that option-based compensation may have the unintended side effect of giving executives an incentive to focus excessively on the short term share price. Copyright 2008, Oxford University Press.
321 citations
Posted Content•
TL;DR: The authors found that shareholders partially anticipate these lawsuits based on lawsuit filings against other firms in the same industry and capitalize part of these losses prior to a lawsuit filing date, and that the more likely a firm is to be sued, the larger is the partial anticipation effect and smaller is the filing date effect.
Abstract: This paper documents significantly negative stock price reactions to shareholder initiated class action lawsuits. We find that shareholders partially anticipate these lawsuits based on lawsuit filings against other firms in the same industry and capitalize part of these losses prior to a lawsuit filing date. We show that the more likely a firm is to be sued, the larger is the partial anticipation effect (shareholder losses capitalized prior to a lawsuit filing date) and smaller is the filing date effect (shareholder losses measured on the lawsuit filing date). Our evidence suggests that previous research that typically focuses on the filing date effect understates the magnitude of shareholder losses, and such an understatement is greater for firms with a higher likelihood of being sued.
299 citations
TL;DR: In this article, the authors investigate the effectiveness of using securities class action lawsuits in monitoring defendant firms by institutional lead plaintiffs from two aspects: (1) immediate litigation outcomes, including the probability of surviving the motion to dismiss and the settlement amount, and (2) subsequent governance improvement such as changes in board independence.
246 citations
Related Topics (5)
Performance Metrics
| Year | Papers |
|---|---|
| 2025 | 33 |
| 2024 | 33 |
| 2023 | 70 |
| 2022 | 92 |
| 2021 | 43 |
| 2020 | 73 |