Timeliness of Share Price Discovery – Does Litigation Improve or Hinder It?

Timeliness of share price discovery is the speed at which value-relevant, private information is released and reflected in a firm‟s share price. As shareholder litigation is a common occurrence in the United States, it could affect the speed at which price discovery occurs. Managers can be personally named in securities class action litigation, and the choice to disclose information to the market will be affected by the fear or experience of shareholder litigation. Will the threat of litigation result in quicker or slower disclosure? Will there be more or less disclosure? If there is a significant effect on disclosure, there will be a direct impact on the timeliness of share price discovery. In addition, my research will look at the effect of certain legal events on timeliness. I hope to find that there is a market-wide effect as a result of significant changes in the legal environment. Any comments are extremely welcome and appreciated. Email address: [email protected]