“Securities Class Actions Mostly Punish Shareholders, Study Finds”

by Walter Olson on December 1, 2010

“A new study in the Financial Analysts Journal casts serious doubt on the premise [of litigation social efficiency], at least when it comes to shareholder class actions. In most cases, the authors found, the litigation mainly serves to punish shareholders who have already suffered from a downturn in their stock. Only suits targeting illegal insider trading, and to a lesser extent, accounting fraud were associated with subsequent higher long-term returns.” [Dan Fisher, Forbes; Rob Bauer and Robin Braun, “Misdeeds Matter: Long-Term Stock Performance after the Filing of Class-Action Lawsuits”] More: Coyote.

{ 3 comments }

1 DensityDuck 12.01.10 at 12:03 pm

Well, duh. ex post facto securities actions are like punishing the chickens because a weasel got in the coop.

2 John Burgess 12.01.10 at 3:07 pm

And then there’s the lawyerly badger, just waiting to scarf up what’s left of the chickens and the weasels.

3 captnhal 12.01.10 at 11:47 pm

They had to do a new study to find this out? I could have told them for free!

Comments on this entry are closed.