Legal Liability and Issuer Expenses in Ipos

Posted: 20 Dec 1998

See all articles by Ivo Welch

Ivo Welch

University of California, Los Angeles (UCLA); National Bureau of Economic Research (NBER)

Randolph P. Beatty

University of Southern California - Leventhal School of Accounting

Date Written: September 1994

Abstract

Issuers of Initial Public Offerings (IPOs) face numerous decisions, of which the selection and compensation of experts---the legal counsel, the auditor and the investment banker---are among the most important. Using new data, our paper investigates the role of the entire IPO coalition (including the legal counsel). We examine how expert compensation, IPO underpricing, IPO underpricing uncertainty, and subsequent performance are related to: [1] expert quality; [2] legal caution and liability; [3] non- legal risk signals; and [4] one another.

JEL Classification: K2, G21

Suggested Citation

Welch, Ivo and Beatty, Randolph P., Legal Liability and Issuer Expenses in Ipos (September 1994 ). Available at SSRN: https://ssrn.com/abstract=5675

Ivo Welch (Contact Author)

University of California, Los Angeles (UCLA) ( email )

110 Westwood Plaza
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Los Angeles, CA 90095-1481
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310-825-2508 (Phone)

HOME PAGE: http://www.ivo-welch.info

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Randolph P. Beatty

University of Southern California - Leventhal School of Accounting ( email )

Los Angeles, CA 90089-0441
United States
213-740-4838 (Phone)

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