Using a sample of 2,241 shareholder lawsuits from 1996 through 2008, we identify 579 lawsuit firms (26%) with publicly traded bonds. We find a mean [median] excess bond return of -2.59% [-1.83%], and a significant increase in trading volume for these bonds around the class action filing date....

In contrast to previous studies documenting positive abnormal returns to target shareholders, we find that hedge fund activism significantly reduces existing bondholders' wealth. Bondholders earn an average excess bond return of -3.9% around the initial 13D filing date, and an additional average...

We examine recent confrontational shareholder activism campaigns by hedge funds and by other private investors. The three main parallels between the groups are a significantly positive market reaction for the target firm around the initial Schedule 13D filing date, a further significant increase...

A prime objective of the Sarbanes-Oxley Act and recent changes to stock exchange listing standards is to improve the quality of financial reporting. We examine the associations between audit committee financial expertise and alternate corporate governance mechanisms and earnings management. We...

This paper examines the impact of Nasdaq Listing Standards on the composition of new listings in the late 1990s. The Nasdaq has two types of listing standards: one based on profitability and the second based explicitly or implicitly on market capitalization. Specifically, unprofitable firms are...

This study examines whether audit committee and board characteristics are related to earnings management by the firm. The motivation behind this study is the implicit assertion by the SEC, the NYSE and the NASDAQ that earnings management and poor corporate governance mechanisms are positively...

Little is known about the economic environments and determinants of the compensation arrangements for outside board members. As delegated monitors of corporate management, board members act as shareholders' agents. Thus, a potential for misaligned interests exists, requiring in turn incentive...

This paper examines and finds systematic economic factors behind variations in audit committee composition. Specifically, audit committee independence is positively related to the informativeness of accounting data in valuation and negatively related to the degree of bargaining power that the...

In this study, I examine possible reasons behind observed differences in audit committee composition and activity. Although 97.9% of all audit committees for large U.S. firms have at least one outside, independent director, more than one-half of the sampled firms also have at least one...

This paper examines four non-mutually-exclusive hypotheses behind the inclusion of different types of directors and the impact they have on firm performance. Strong associations are found between the specific economic needs of companies and the incidence of directors most likely to fulfill these...