We examine the effect of investor attention on value loss due to securities class action lawsuits and fraud discovery. We find that investor attention is positively associated with damage to corporate reputation and the magnitude of value losses suffered by the defendant firm. The reputational...

We examine the impact of securities class action lawsuits on firms' investment and financing choices. Firms which overinvest are more likely to be sued. After a lawsuit, firms on average decrease overinvestment activity, and they decrease payouts while increasing leverage, cash holdings, and...

This paper examines whether shareholder litigation contributes to the decline in U.S. stock market listings. We find that higher litigation risk induces firms to delist. We establish causality by exploiting a 1999 decision by the Ninth Circuit Court that reduced litigation risk. The effect is at...

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 examine the relation between litigation risk and IPO underpricing and test two aspects of the litigation-risk hypothesis: (1) firms with higher litigation risk underprice their IPOs by a greater amount as a form of insurance (insurance effect) and (2) higher underpricing lowers expected...