Shareholder Litigation and the Information Environment

 

 

Speaker: Eliezer M. Fich, Drexel University

 

We study whether the threat of shareholder litigation affects firms’ information environments. Our source of variation is the staggered adoption of universal demand (UD) laws at the state level, which impose greater hurdles for shareholders to bring derivative lawsuits against fiduciaries at the firm. After UD laws pass, firms provide more opaque financial statements, analyst dispersion and forecast error increase, and the trading environment declines. Moreover, firms incorporated in UD states are less likely to face financial misconduct charges. Finally, we find that insiders earn greater trading profits, suggesting that they benefit from the reduced transparency.

 

A light lunch will be provided at 1.00 p.m. Please RSVP for catering purposes to Mala Kapahi by 12 noon on Monday 6th August 2018.

 

Time: 12.00 – 1.00 p.m.

Venue: University of Technology, Sydney

             Building 8, Room 8.002, Dr Chau Chak Wing Building
             Dr Chau Chak Wing Building

             14 - 28 Ultimo Road, Ultimo

 

 

Enquiries: Mala Kapahi (Ph: +61 2 9514 7777)