24,709 research outputs found
Mapping the American Shareholder Litigation Experience: A Survey of Empirical Studies of the Enforcement of the U.S. Securities Law
In this paper, we provide an overview of the most significant empirical research that has been conducted in recent years on the public and private enforcement of the federal securities laws. The existing studies of the U.S. enforcement system provide a rich tapestry for assessing the value of enforcement, both private and public, as well as market penalties for fraudulent financial reporting practices. The relevance of the U.S. experience is made broader by the introduction through the PSLRA in late 1995 of new procedures for the conduct of private suits and the numerous efforts to evaluate the effects of those provisions.
We believe that the evidence reviewed here shows that the PSLRA\u27s provisions have largely achieved their intended purposes. For example, many more private suits are headed by an institutional lead plaintiff, such plaintiffs appear to fulfill the desired role of monitoring the suit\u27s prosecution and their presence is associated with suits yielding better settlements and lower attorneys\u27 fees awards. SEC enforcement efforts, while significant, have tended to focus on weaker targets, suggesting that the big fish get away. Equally importantly, markets impose their own discipline on companies whose managers release false financial reports and, in turn, firms discipline the managers who are responsible for false misleading reporting, perhaps because of the presence of, or potential for, private enforcement actions
Public and Private Enforcement of the Securities Laws: Have Things Changed Since Enron?
In this paper, we examine how those corporations that have been the targets of SEC enforcement efforts compare in terms of their size and financial health vis-a-vis firms that are targeted only by the private securities class action. We also ask whether the SEC or the private bar systematically proceeds against violators that cause the greatest loss to investors. In this regard, we are intrigued by the most basic question posed by private suits, whether settlements bear any relationship to the losses suffered by the class and whether those losses bear any relationship to the size of either the firm itself or the duration of the class action. Our data set consists of 389 securities class action settlements that occurred between 1990 and 2003. Using multivariate regression analysis to examine the determinants of government litigation, we find a sharp change in the pattern of SEC enforcement actions after the end of 2001. We find that the SEC seems to have shifted its enforcement focus away from targeting frauds at firms in financial distress to seeking out frauds at companies where investors may have suffered larger losses, especially if they are smaller firms. Again applying multivariate regression analysis, we look at settlement sizes in private class actions. We find that provable losses, total assets, class period and the presence of an SEC enforcement action, are all positively and significantly related to the dollar amount of the settlement obtained in a private action. These effects do not change over the time period of our sample. The fact that provable losses are such an important determinant of the size of actual recoveries supports the view that the merits do matter
Mapping the American Shareholder Litigation Experience: A Survey of Empirical Studies of the Enforcement of the U.S. Securities Law
In this paper, we provide an overview of the most significant empirical research that has been conducted in recent years on the public and private enforcement of the federal securities laws. The existing studies of the U.S. enforcement system provide a rich tapestry for assessing the value of enforcement, both private and public, as well as market penalties for fraudulent financial reporting practices. The relevance of the U.S. experience is made broader by the introduction through the PSLRA in late 1995 of new procedures for the conduct of private suits and the numerous efforts to evaluate the effects of those provisions.
We believe that the evidence reviewed here shows that the PSLRA\u27s provisions have largely achieved their intended purposes. For example, many more private suits are headed by an institutional lead plaintiff, such plaintiffs appear to fulfill the desired role of monitoring the suit\u27s prosecution and their presence is associated with suits yielding better settlements and lower attorneys\u27 fees awards. SEC enforcement efforts, while significant, have tended to focus on weaker targets, suggesting that the big fish get away. Equally importantly, markets impose their own discipline on companies whose managers release false financial reports and, in turn, firms discipline the managers who are responsible for false misleading reporting, perhaps because of the presence of, or potential for, private enforcement actions
Measuring Securities Market Efficiency in the Regulatory Setting
In Nov 1998, the SEC proposed a modification to the federal securities law disclosure requirements to facilitate the process of issuing new securities. Thomas and Cotter discuss how to determine when companies should be able to issue simplified disclosure documents
Delaware\u27s Retreat: Exploring Developing Fissures and Tectonic Shifts in Delaware Corporate Law
Addressing Agency Costs through Private Litigation in the U.S: Tensions, Disappointments, and Substitutes
Many scholars argue that over the past seventy years, shareholder representative litigation has acted as an important policing mechanism of managerial abuses at U.S. public companies. Different types of representative litigation have had their moment in the sun – derivative suits early on, followed by federal securities class actions, and most recently merger litigation – often producing benefits for shareholders, but posing difficult challenges as well. In particular, the benefits are qualified by another concern, the litigation agency costs that surround shareholder suits. This form of agency costs arises since the suits are invariably representative with no requirement that the named plaintiffs have a substantial ownership interest in the corporation, so that their prosecution could be easily seen as lawyer-driven. And that perception is further underscored in the U.S. where the “American Rule,” in contrast to the “Loser Pays Rule,” provides no governor on the suit’s initiation and prosecution.
In this article, we assess the interactions of shareholder suits and governance mechanisms. Our thesis is straightforward: we claim that the recent rise of some important governance developments is a natural consequence of both the ineffectiveness and inefficiency of private suits to address certain genre of managerial agency costs. That is, just as one part of a balloon expands when another part contracts, we find that governance responses evolve to fill voids caused by the decompression of shareholder monitoring once supplied by private suits. In other words, as representative shareholder litigation comes under increasing attack, greater attention needs to be devoted to governance and market mechanisms as alternative means to address managerial agency costs
Nonlinear Evolution of the Magnetohydrodynamic Rayleigh-Taylor Instability
We study the nonlinear evolution of the magnetic Rayleigh-Taylor instability
using three-dimensional MHD simulations. We consider the idealized case of two
inviscid, perfectly conducting fluids of constant density separated by a
contact discontinuity perpendicular to the effective gravity g, with a uniform
magnetic field B parallel to the interface. Modes parallel to the field with
wavelengths smaller than l_c = [B B/(d_h - d_l) g] are suppressed (where d_h
and d_l are the densities of the heavy and light fluids respectively), whereas
modes perpendicular to B are unaffected. We study strong fields with l_c
varying between 0.01 and 0.36 of the horizontal extent of the computational
domain. Even a weak field produces tension forces on small scales that are
significant enough to reduce shear (as measured by the distribution of the
amplitude of vorticity), which in turn reduces the mixing between fluids, and
increases the rate at which bubbles and finger are displaced from the interface
compared to the purely hydrodynamic case. For strong fields, the highly
anisotropic nature of unstable modes produces ropes and filaments. However, at
late time flow along field lines produces large scale bubbles. The kinetic and
magnetic energies transverse to gravity remain in rough equipartition and
increase as t^4 at early times. The growth deviates from this form once the
magnetic energy in the vertical field becomes larger than the energy in the
initial field. We comment on the implications of our results to Z-pinch
experiments, and a variety of astrophysical systems.Comment: 25 pages, accepted by Physics of Fluids, online version of journal
has high resolution figure
Shareholder Welfare in Minority Freeze-Out Bids: Are Legal Protections Sufficient? Evidence from the U.S. Market
Anlegerschutz, Kleinaktionär, Diskriminierung, Vereinigte Staaten, Investor protection, Small shareholders, Discrimination, United States
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