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Internal and external discipline following securities class actions

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  • Humphery-Jenner, Mark L.

Abstract

Companies are sometimes accused of misleading the market. The SEC can punish this with enforcement actions. Alternatively, shareholders can seek redress through a shareholder class action (SCA). Thus, using a sample of 416 securities class actions, this paper shows that SCAs are a catalyst to promote disciplinary takeovers, CEO turnover and pay-cuts, and harm CEOs’ future job-prospects.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Financial Intermediation.

Volume (Year): 21 (2012)
Issue (Month): 1 ()
Pages: 151-179

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Handle: RePEc:eee:jfinin:v:21:y:2012:i:1:p:151-179

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Web page: http://www.elsevier.com/locate/inca/622875

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Keywords: Securities class actions; Securities law; Governance; Ethics; Takeovers; Managerial turnover; Fraud; Disclosure;

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Cited by:
  1. Humphery-Jenner, Mark, 2012. "The impact of the EU takeover directive on takeover performance and empire building," Journal of Corporate Finance, Elsevier, vol. 18(2), pages 254-272.
  2. Dutt, Tanuj & Humphery-Jenner, Mark, 2013. "Stock return volatility, operating performance and stock returns: International evidence on drivers of the ‘low volatility’ anomaly," Journal of Banking & Finance, Elsevier, vol. 37(3), pages 999-1017.

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