Information bundling and securities litigation

• 成果类型: Article
• 署名作者: Bliss, Barbara A.; Partnoy, Frank; Furchtgott, Michael
• 署名单位: University of San Diego; University of San Diego; Microsoft
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2017.11.013
• 发表日期: 2018
• 关键词: EMPIRICAL-ANALYSIS; earnings announcements; SHAREHOLDER LITIGATION; bad-news; disclosure; dividend; FIRMS; forecasts; lawsuits; IMPACT

摘要

We exploit the exogenous shock of a 2005 U.S. Supreme Court decision on securities class action loss causation requirements to examine two ways that firms bundle information with restatements: positive bundling of good news and noise bundling of additional bad news. We find that positive bundling offsets price declines and results in less litigation. In contrast, noise bundling magnifies price declines, but nevertheless deters litigation by confounding which bad news caused a decline. Non-bundled restatements are 5.94 times more likely to result in litigation. Bundled restatements have 8.17 times higher dismissal rates and $21.17 to $23.45 million lower settlement amounts. (C) 2017 Elsevier B.V. All rights reserved.