This study provides evidence that short selling influences the disclosure of bad news by firms. Managers have incentives to withhold or delay the release of bad news. As informed traders, short sellers enhance the informativeness of stock prices, especially related to bad news, potentially...

We document pervasive informed trading activity in equity options before M&A announcements. About 25% of takeovers have positive abnormal volumes. These volume patterns indicate that informed traders are likely using bullish directional strategies for the target and volatility strategies for the...

This paper studies the market-level effects of litigation rights in an imperfectly competitive capital market with a market maker, an information-acquiring investor, and liquidity traders. Litigation rights have the following equilibrium effects. (i) The investor acquires more private...

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 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...

Are event studies in securities litigation reliable? Basic's fraud-on-the-market presumption sparked the wide use of event studies in securities litigation, and the Supreme Court's 2014 decision in Halliburton will make event studies even more important, as litigants fight over the existence of...

The paper offers an empirical analysis of the effects of sanctions decided by the Financial Markets Authority (AMF) on the reputation of firms in France. Using an event study, we intend to show the impact of three events on the stock prices: opening of an investigation by the AMF; issuance of a...

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...

How does Supreme Court precedent affect lower court decisions when there is asymmetric probability of appellate review? Using securities fraud class actions filed between 2003 and 2007, we study the impact of a widely-followed Supreme Court decision from that period, Tellabs, Inc. v. Makor...

This paper is the first one that uses a panel data of different types of shareholder protection in order to examine (i) the effect of such laws on stock market development and (ii) the convergence of shareholder protection laws through cross-border mergers and acquisitions. We find significant...