The Effects of Securities Class Action Litigation on Corporate Liquidity and Investment Policy

The risk of securities class action litigation alters corporate savings and investment policy. Firms with greater exposure to securities litigation hold significantly more cash in anticipation of future settlements and other related costs. The result is due to firms accumulating cash in anticipation of lawsuits and not a consequence of plaintiffs targeting firms with high cash levels. The market value of cash is significantly lower for firms exposed to litigation risk. Corporate investment decisions are also affected by litigation risk, as firms reduce capital expenditures in response. Our results are robust to endogeneity concerns and possible spurious temporal effects

A Survey of Litigation in Corporate Finance

Purpose The purpose of this paper is to review research on litigation in corporate finance. Design/methodology/approach This paper surveys studies on the estimation of litigation risk, litigation costs, stock reaction to lawsuit announcement, and the effect of litigation on corporate financial policies and outcomes. Findings The first section presents a survey of studies that estimate litigation risk. The authors then discuss a set of studies that focus on the various costs associated with litigation. The third area of review is about studies which estimate the market reaction to a lawsuit announcement. The next section surveys studies that examine the relation between litigation and a variety of corporate policies, behaviors, and outcomes. The authors then discuss the emerging literature on how corporate political connections can influence the outcome of litigation. The survey concludes with a brief summary and a discussion of suggestions for future research involving corporate litigation. Originality/value By providing an extensive review of the literature on litigation in corporate finance, this survey can help researchers to identify recent trends in litigation research and select promising new avenues of investigation in the field

When Managers Bypass Shareholder Approval of Board Appointments: Evidence from the Private Security Market

This paper investigates the influence of managerial entrenchment on private placements by examining the firm\u27s decision to appoint representatives of the private investors to the board without shareholder approval. By analyzing a sample of U.S. firms that appoint directors in combination with private offerings between 1995 and 2000, we find that firms with greater managerial entrenchment are more likely to bypass shareholder approval. Firms that bypass shareholders are less likely to appoint independent directors or to elect one of these directors as chairman. We also show that the market reacts more positively to the private offering announcement when the firm submits its board candidates for shareholder approval. Further, firms that bypass approval underperform compared to firms that obtain it. Overall our findings suggest that managers avoid shareholder approval to perpetuate entrenchment

A Face Can Launch a Thousand Shares—and an 0.80% Abnormal Return

In this paper we examine the market reaction—price and volume—to the appearance of a firm in the Who’s News column of The Wall Street Journal. We differentiate between those firms whose articles are accompanied by a picture of an executive and a control set of firms whose articles on the same day are not accompanied by a picture. The results show a more pronounced market reaction to the “cum picture” articles, consistent with the incomplete information theory of Merton [1987] and the heuristic-based familiarity hypothesis. There is no evidence of significant long-run abnormal performance for the sample firms

The Discretionary Effect of CEOs and Board Chairs on Corporate Governance Structures

In this study we analyze the effect of latent managerial characteristics on corporate governance. We find that CEO and board chair fixed effects explain a significant portion of the variation in board size, board independence, and CEO-chair duality even after controlling for several firm characteristics and firm fixed effects. The effect of CEOs on corporate governance practices is attributable mainly to executives who simultaneously hold the position of CEO and board chair in the same firm. Our results do not show a decline in CEO discretionary influence on corporate governance after the enactment of the Sarbanes–Oxley Act and stock exchange governance regulations

The Evolution of Reaction-diffusion Controllers for Minimally Cognitive Agents

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Rapid, Low Level Determination of Silver(I) in Drinking Water by Colorimetric–solid-phase Extraction

A rapid, highly sensitive two-step procedure for the trace analysis of silver(I) is described. The method is based on: (1) the solid-phase extraction (SPE) of silver(I) from a water sample onto a disk impregnated with a silver-selective colorimetric reagent, and (2) the determination of the amount of complexed analyte extracted by the disk by diffuse reflectance spectroscopy (DRS). This method, called colorimetric–solid-phase extraction (C–SPE), was recently shown effective in determining low concentrations (0.1–5.0 mg/ml) of iodine and iodide in drinking water. This report extends C–SPE to the trace (∼4 μg/l) level monitoring of silver(I) which is a biocide used on the International Space Station (ISS). The determination relies on the manually driven passage of a water sample through a polystyrene–divinylbenzene disk that has been impregnated with the colorimetric reagent 5-(p-dimethylaminobenzylidene) rhodanine (DMABR) and with an additive such as a semi-volatile alcohol (1,2-decanediol) or nonionic surfactant (Brij 30). The amount of concentrated silver(I) is then determined in a few seconds by using a hand-held diffuse reflectance spectrometer, with a total sample workup and readout time of ∼60 s. Importantly, the additive induces the uptake of water by the disk, which creates a local environment conducive to silver(I) complexation at an extremely high concentration factor (∼800). There is no detectable reaction between silver(I) and impregnated DMABR in the absence of the additive. This strategy represents an intriguing new dimension for C–SPE in which additives, directly loaded in the disk material, provide a means to manipulate the reactivity of the impregnated reagent

Parametric thermal analysis for the optimization of Double Walled Tubes layout in the Water Cooled Lithium Lead inboard blanket of DEMO fusion reactor

Within the roadmap that will lead to the nuclear fusion exploitation for electric energy generation, the construction of a DEMOnstration (DEMO) reactor is, probably, the most important milestone to be reached since it will demonstrate the technological feasibility and economic competitiveness of an industrial-scale nuclear fusion reactor. In order to reach this goal, several European universities and research centres have joined their efforts in the EUROfusion action, funded by HORIZON 2020 UE programme. Within the framework of EUROfusion research activities, ENEA and University of Palermo are involved in the design of the Water-Cooled Lithium Lead Breeding Blanket (WCLL BB), that is one of the two BB concepts under consideration to be adopted in the DEMO reactor. It is mainly characterized by a liquid lithium-lead eutectic alloy acting as breeder (lithium) and neutron multiplier (lead), as well as by subcooled pressurized water as coolant. Two separate circuits, both characterized by a pressure of 15.5 MPa and inlet/outlet temperatures of 295 °C/328 °C, are deputed to cool down the First Wall (FW) and the Breeder Zone (BZ). The former consists in a system of radial-toroidal-radial C-shaped squared channels where countercurrent water flow occurs while the latter relies in the use of bundles of poloidal-radial Double Walled Tubes (DWTs) housed within the breeder. A parametric thermal study has been carried out in order to assess the best DWTs' layout assuring that the structural material maximum temperature does not overcome the allowable limit of 550 °C and that the overall coolant thermal rise fulfils the design target value of 33 °C. The study has been performed following a theoretical-numerical approach based on the Finite Element Method (FEM) and adopting the quoted Abaqus FEM code. Main assumptions and models together with results obtained are herewith reported and critically discussed

Corporate Litigation and Debt

This study examines the effect of litigation risk and litigation costs on firms’ credit ratings and debt financing. The results show that litigation affects a firm\u27s creditworthiness and debt costs in two stages. Before a lawsuit filing, firms at higher risk of litigation have lower credit ratings, are more likely to be rated speculative grade, pay higher yields on loans and bonds, and are less likely to rely on debt financing. At the time of the lawsuit resolution, settlement costs have an additional effect on firm credit quality. Companies facing larger settlement disbursements in relation to their available cash experience a decline in credit ratings and an increase in yield spread. The results are robust to endogeneity concerns and different proxies of litigation risk

Peak Ventilation Reference Standards from Exercise Testing: From the FRIEND Registry

Peak Ventilation Reference Standards from Exercise Testing: From the FRIEND Registry. Med. Sci. Sports Exerc., Vol. 50, No. 12, pp. 2603–2608, 2018. Purpose: Cardiopulmonary exercise testing (CPX) provides valuable clinical information, including peak ventilation (V˙ Epeak), which has been shown to have diagnostic and prognostic value in the assessment of patients with underlying pulmonary disease. This report provides reference standards for V˙ Epeak derived from CPX on treadmills in apparently healthy individuals. Methods: Nine laboratories in the United States experienced in CPX administration with established quality control procedures contributed to the Fitness Registry and the Importance of Exercise National Database from 2014 to 2017. Data from 5232 maximal exercise tests from men and women without cardiovascular or pulmonary disease were used to create percentiles ofV˙ Epeak for both men and women by decade between 20 and 79 yr. Additionally, prediction equations were developed for V˙ Epeak using descriptive information. Results: V˙ Epeak was found to be significantly different between men and women and across age groups (P G 0.05). The rate of decline in V˙ Epeak was 8.0% per decade for both men and women. A stepwise regression model of 70% of the sample revealed that sex, age, and height were significant predictors ofV˙ Epeak. The equation was cross-validated with data from the remaining 30% of the sample with a final equation developed from the full sample (r = 0.73). Additionally, a linear regression model revealed forced expiratory volume in 1 s significantly predicted V˙ Epeak (r = 0.73). Conclusions: Reference standards were developed for V˙ Epeak for the United States population. Cardiopulmonary exercise testing laboratories will be able to provide interpretation of V˙ Epeak from these age and sex-specific percentile reference values or alternatively can use these nonexercise prediction equations incorporating sex, age, and height or with a single predictor of forced expiratory volume in 1 s