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Discussion of ‘shareholder litigation and changes in disclosure behavior’
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Discussion of ‘shareholder litigation and changes in disclosure behavior’

Michelle Lowry
Journal of accounting & economics, v 47(1), pp 157-159
01 Mar 2009
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https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1299610_code210629.pdf?abstractid=1299610&mirid=3View
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Abstract

Class action lawsuits Litigation risk Voluntary disclosure
Rogers and VanBuskirk [2008. Shareholder litigation and changes in disclosure behavior. Journal of Accounting and Economics 40, 3–73] examine changes in sued firms’ disclosure policies between the pre-lawsuit and post-lawsuit periods. They find that these firms decrease the magnitude and precision of disclosures following the lawsuits. The authors conclude that managers of sued firms perceive disclosure to contribute to (rather than decrease) the probability of being sued. While the evidence showing that the magnitude and precision of disclosure decreases post-lawsuit appears to be robust, I raise some questions about what we learn from this finding.

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Business, Finance
Economics
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