This study examines the trading behavior of a large sample of individual (retail) investors around securities litigation events. We test the hypothesis that the response of these investors around the end of the litigation class period (at the time of a corrective disclosure) and the start of the...

This paper outlines a framework for evaluating the effect of traded options on aggregate damages in class action litigation brought under The Securities and Exchange Commission's rule 10b-5. Although buyers of call options and sellers of put options are sometimes included in the class, it is far...

This short essay considers the findings and recommendations of the Paulson Report relating to securities fraud class actions under the 1934 Act and Rule 10b-5. While the report exposes numerous problems with securities litigation in the United States, it understates the problems inherent in...

In a recent article, I argued that diversified investors - the vast majority of investors - would prefer that securities fraud class actions under the 1934 Act and Rule 10b-5 be dismissed in the absence of insider trading or similar offenses during the fraud period. See Richard A. Booth, The End...

This paper examines the relationship between the quality of disclosure in companies' 10-K filings and the risk of securities class action litigation. I use a dataset containing 10-K documents filed electronically with the SEC in the period 1996-2005. Using two content analysis software programs...

The Supreme Court's decision in Merrill Lynch, Pierce, Fenner amp; Smith, Inc. v. Dabit, involves the reconciliation of three significant policy goals - controlling abusive litigation, deterring securities fraud, and preserving our federal system by limiting the federal government's power. These...

The attorney-client privilege protects communications between a client and his attorney, so that other litigants cannot demand these e-mails, letters, and so on through the pre-trial process of discovery. This privilege is ordinarily waived, however, if the client leaks such a document to a...

Over the last decade, financial economists have grown increasingly circumspect about the practical meaning of market efficiency due to the so-called joint hypothesis problem. In law, however, the concept has taken on an increasingly prominent role, meaning that the need for an operational...

Criminal prosecution of financial reporting-related corporate misconduct is generally acknowledged to be sometimes warranted. The decision to seek an indictment of Arthur Andersen remains controversial, however. Eisenberg and Macey (2004) posit that because the resulting increased concentration...

Class action law enforcement is a resource-intensive undertaking, requiring investment of both intellectual capital and financial wherewithal. Building on insights developed in the economic theory of investment under uncertainty, the key theoretical proposition is that class action law...