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Securities fraud and corporate board turnover: New evidence from lawsuit outcomes

Listed author(s):
  • Baum, Christopher F.
  • Bohn, James G.
  • Chakraborty, Atreya

We examine the relationship between outcomes of securities fraud class action lawsuits (SFCAs) and corporate board turnover rates. Our results indicate that turnover rates for board members are higher when a firm settles a lawsuit than when a suit is dismissed. Outside director turnover is most sensitive to SFCA outcomes, perhaps reflecting reputational effects. Results demonstrate that involvement in securities fraud is costly for corporate board members.

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File URL: http://www.sciencedirect.com/science/article/pii/S0144818816300394
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Article provided by Elsevier in its journal International Review of Law and Economics.

Volume (Year): 48 (2016)
Issue (Month): C ()
Pages: 14-25

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Handle: RePEc:eee:irlaec:v:48:y:2016:i:c:p:14-25
DOI: 10.1016/j.irle.2016.07.001
Contact details of provider: Web page: http://www.elsevier.com/locate/irle

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