The Risks of Disclosure: Increased litigation costs following disclosure post-PSLRA

What role does public disclosure by a defendant firm play in the outcome of securities fraud class actions? In a recent article we study this question and find when a defendant firm discloses more via press releases and conference calls, it is more likely to experience an adverse outcome in litigation. While the possibility of private legal liability likely improves the quality and integrity of disclosure, it may also make firms reluctant to release information to financial markets. These compelling findings should be of interest to companies and legal practitioners as they evaluate corporate disclosure decisions and policies, as well … Read more