This paper investigates the effectiveness of using securities class action lawsuits in monitoring defendant firms by institutional lead plaintiffs from two aspects: (1) immediate litigation outcomes, including the probability of surviving the motion to dismiss and the settlement amount, and (2)...

We investigate the effects of the filing of securities class actions on firms' cost of equity capital and shareholder wealth. We posit that class action litigation increases perceived uncertainties about the firm and leads to an increase in its cost of equity capital. Using three models for...

Hedge fund intervention has been associated with many positive corporate changes and is an important vehicle for informed shareholder monitoring. Effective monitoring has also been positively associated with accounting conservatism. Building upon these prior results, we predict an increase in...