Internal and External Discipline Following Securities Class Actions

M. Humphery-Jenner

Research output: Working paperDiscussion paperOther research output

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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). While some literature has examined SEC actions, it has not examined SCAs, and has not examined external discipline and the managers's future employment prospects after either action. Thus, using a sample of 416 securities class actions, this paper shows that SCAs are a catalyst to promote disciplinary takeovers, CEO/CFO turnover and CEO/CFO pay-cuts, and harm CEOs future job-prospects. This suggests that even if the law governing SCAs is sub-optimal, they can still induce internal and external discipline.
Original languageEnglish
Place of PublicationTilburg
PublisherEconomics
Volume2011-044
Publication statusPublished - 2011

Publication series

NameCentER Discussion Paper
Volume2011-044

Fingerprint

Chief executive officer
Shareholders
Catalyst
Turnover
Managers
Enforcement

Keywords

  • Securities Class Actions
  • Securities Law
  • Governance
  • Ethics
  • Takeovers
  • Managerial Turnover
  • Fraud
  • Disclosure

Cite this

Humphery-Jenner, M. (2011). Internal and External Discipline Following Securities Class Actions. (CentER Discussion Paper; Vol. 2011-044). Tilburg: Economics.
Humphery-Jenner, M. / Internal and External Discipline Following Securities Class Actions. Tilburg : Economics, 2011. (CentER Discussion Paper).
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Humphery-Jenner, M 2011 'Internal and External Discipline Following Securities Class Actions' CentER Discussion Paper, vol. 2011-044, Economics, Tilburg.

Internal and External Discipline Following Securities Class Actions. / Humphery-Jenner, M.

Tilburg : Economics, 2011. (CentER Discussion Paper; Vol. 2011-044).

Research output: Working paperDiscussion paperOther research output

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Humphery-Jenner M. Internal and External Discipline Following Securities Class Actions. Tilburg: Economics. 2011. (CentER Discussion Paper).