Sky Blog
Securities class-action lawsuits play a crucial role in holding corporations accountable for financial misdeeds. They typically involve allegations of securities fraud, where a company makes misleading statements or omits important information that leads to an inflated stock price. When the …
Corporate fraud poses a significant agency cost for stock ownership. Activist short sellers, who conduct and publicize investigative research, play a crucial role in exposing such fraud, in contrast with most short sellers who quietly await price catalysts without public …
Many academics, managers, lawyers, and others believe that nonmeritorious securities fraud class actions – those that will be dismissed or settled for nuisance amounts – damage corporate reputations. For example, litigation public relations experts claim that individuals adopt a “guilty …
Stock prices affect various corporate decisions such as the amount of CEO compensation, as emphasized in traditional pay-for-performance studies, and capital investment. However, an unanswered question is whether changes in firms’ stock price in a short window around events related …
Women have traditionally suffered from discrimination in the labor market (Tatli et al., 2013) and are under-represented in upper management (Thams, Bendell and Terjesen, 2018). To address this widespread gender imbalance, many countries have implemented gender diversity policies ranging from …
Algorithmic trading (AT) is one of the most notable financial innovations in several decades and constitutes a substantial portion of recent trading in stock markets. However, evidence on the economic consequences of AT is mixed. On one hand, prior research …
Corporate payouts have reached record levels. Over the past half-century, publicly-held U.S. firms have more than tripled inflation-adjusted dividends, while real share repurchase values have ballooned from $5 billion in 1971 to almost $1 trillion in 2018 and become the …
Can managers obtain more useful feedback from capital markets by disclosing pieces of information separately and at different times instead of bundling the information and releasing it at once? It is well known that capital markets’ response to firms’ announcements …
Climate-change risks can result from physical forces like wildfires, floods, or droughts or from changes in policy, the so-called transition risks created by government actions or the adoption of new technologies. A key question for academics, policy makers, firms, and …
Discussions on the role of higher-order beliefs (investor beliefs about the beliefs of other investors) in financial markets can be traced back to Keynes’ (1936) comparison of the stock market to a beauty contest. Investors “are concerned,” he famously said, …
In a forthcoming paper, we explore the stock prices of companies during the period just before to just after an announcement that they have been hit with a computer breach. We analyze all available public equity data by breach type …
Investors, hedge funds, regulators, banks, and attorneys want to know: What really happens when a company misses a regulatory deadline? In a new paper, we offer theory and quantitative analysis of the consequences of missing U.S. Securities and Exchange Commission …