This study finds that the managers of firms that have been the target of class action lawsuits alleging securities fraud did not, on average, have an unusual incentive to conceal negative information. Nevertheless, CEO turnover is higher in those cases where the suites have merit, indicating...

Insiders with nonpublic information that their firms are acquisition targets can profit by purchasing their firms' stock or by delaying planned sales of their firms' stock. Under current securities laws, insiders who execute the former strategy expose themselves to civil and criminal liability,...

U.S. bank regulations weaken the incentives for market-based monitoring of bank CEOs, and bank assets are difficult for outside investors to value. Therefore, we analyzed factors that might influence institutional holdings of bank shares. Our primary expectation was that alignment of the...

Event risk covenants (ERCs), such as poison puts, can protect bondholders from losses related to highly leveraged transactions. Previous observers argue that managers could use ERCs primarily to benefit shareholders or to entrench, and the evidence on the shareholder wealth effects of ERCs is...