Shareholder Litigation and Changes in Disclosure Behavior
Jonathan L. Rogers
University of Colorado at Boulder - Leeds School of Business
Andrew Van Buskirk
Ohio State University (OSU) - Department of Accounting & Management Information Systems
April 1, 2008
AAA 2007 Financial Accounting & Reporting Section (FARS) Meeting Paper
Journal of Accounting & Economics (JAE), Vol. 47, No. 1-2, 2009
We examine changes in the disclosure behavior of firms involved in 827 disclosure-related class-action securities litigation cases filed between 1996 and 2005. We find no evidence that the firms in our sample respond to the litigation event by increasing or improving their disclosures to investors. Rather, we find consistent evidence that firms reduce the level of information provided post-litigation. Our results suggest that the litigation process encourages firms to decrease the provision of disclosures for which they may later be held accountable, despite the increased protections afforded by the Private Securities Litigation Reform Act of 1995.
Number of Pages in PDF File: 58
Keywords: Disclosure, Litigation, Management Forecasts, Earnings Surprises, Litigation Risk, Conference Calls, Forecast Properties
JEL Classification: M41, M45, G14, K22Accepted Paper Series
Date posted: September 15, 2006 ; Last revised: September 14, 2011
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