Appraisal: Shareholder Remedy or Litigation Arbitrage?

Shareholder Litigation and Corporate Innovation

We examine whether and to what extent shareholder litigation shapes corporate innovation. We use the staggered adoption of the universal demand (UD) laws in 23 states from 1989 to 2005. These laws impose obstacles against shareholders filing derivative lawsuits thereby significantly reducing a firm’s litigation risk. Following the passage of the UD laws, firms have invested more in R&D, produce...

“ Does Shareholder Litigation Deter Insider Trading ? ” on

This paper examines the possible deterrent effect of actual shareholder litigation on insider trading behavior for both defendant firms and their industry peers. We construct a composite index to capture the strength of a lawsuit as reflected in its merits and the rigorousness of the litigation process. Using a large litigation sample from 1996 to 2009, we find a significant decrease in the int...

Executive pay, earnings manipulation and shareholder litigation

The paper examines the role of executive compensation in inducing management behavior that triggers private securities litigation. Incentive pay in the form of options is found to increase the probability of securities class action lawsuits, holding constant a wide range of other firm characteristics. In contrast, base pay levels and share ownership do not have a significant impact on lawsuit i...

The Affordable Care Act, remedy, and litigation reform.

The Patient Protection and Affordable Care Act of 2010 (ACA) rewrote the law of private health insurance. How the ACA rewrote the law of civil remedies, however, is a question largely unexamined by scholars. Courts everywhere, including the U.S. Supreme Court, will soon confront this important issue. This Article offers a foundational treatment of the ACA on remedy. It predicts a series of flas...

Erythrocyte transfusion: remedy or poison?