Growing Securities Litigation Against Issuers in Japan: Its Background and Reality

2016 ◽  
Author(s):  
Gen Goto
Keyword(s):  
Securities Litigation

Spillover Effects in Securities Litigation

2019 ◽  
Author(s):  
Dain C. Donelson ◽  
Rachel Flam ◽  
Christopher G. Yust
Keyword(s):  
Spillover Effects ◽  
Securities Litigation

The Effect of the Private Securities Litigation Reform Act of 1995 on Accounting Discretion of Client Managers of Big 6 and Non-Big 6 Auditors

2003 ◽  
Vol 22 (1) ◽  
pp. 93-108 ◽  
Author(s):  
Ho Young Lee ◽  
Vivek Mande
Keyword(s):  
Earnings Management ◽  
Potential Benefit ◽  
Audit Quality ◽  
Discretionary Accruals ◽  
Securities Litigation ◽  
Investor Confidence ◽  
Joint And Several Liability ◽  
Before And After ◽  
Deep Pockets

This study examines how the Private Securities Litigation Reform Act of 1995 (PSLRA) affects auditors' incentives to curtail earnings management by client managers. The most significant reform of PSLRA was the elimination of joint and several liability under which auditors and other parties could be named to lawsuits because of ‘deep pockets’ rather than culpability. While the elimination of joint and several liability provides significant relief to auditors from litigation, opponents of PSLRA argue that it discourages meritorious lawsuits and lowers audit quality, reducing investor confidence in markets. The potential benefit would be greatest for Big 6 firms, who have the highest exposure (largest clients) and significant resources to pay damages. In this paper we argue that if PSLRA induces decreases in audit quality, then we should expect increases in the prevalence of accruals after this Act. To investigate this issue we examine the discretionary accruals of a sample of 2,600 companies three years before and after the act. Our results support this hypothesis. Specifically, we find that after PSLRA income-increasing discretionary accruals rise for auditees of Big 6 firms but not for auditees of non-Big 6 firms.

COVID-19 considerations for SEC cybersecurity guidance, disclosure, enforcement, and parallel proceedings: navigating the new normal

2020 ◽  
Vol 21 (2/3) ◽  
pp. 111-126
Author(s):  
Aldo M. Leiva ◽  
Michel E. Clark
Keyword(s):  
Securities And Exchange Commission ◽  
Effective Vaccine ◽  
Resource Reallocation ◽  
Securities Litigation ◽  
Public Companies ◽  
Content Type ◽  
Business Operations ◽  
Expert Analysis ◽  
Securities Industry ◽  
Remote Operations

Purpose To examine the COVID-19 pandemic’s effects on regulated entities within the context of cybersecurity, US Securities and Exchange Commission (SEC) compliance, and parallel proceedings. Design/methodology/approach Describes the SEC’s ability to conduct its operations within the telework environment, its commitment and ability to monitor the securities market, its enhanced monitoring of the adverse effects of SEC-regulated companies from COVID-19, its guidance to public companies of disclosure obligations related to cybersecurity risks and incidents, the SEC Office of Compliance and Examinations’s (OCIE’s) focus on broker-dealers’ and investment advisories’ cybersecurity preparedness, the role and activities of the SEC Division of Enforcement’s Cyber Unit, and parallel proceedings on cyberbreaches and incidents by different agencies, branches of government or private litigants. Findings SEC-regulated entities face many challenges in trying to maintain their ongoing business operations and infrastructure due to severe financial pressures, the threat of infection to employees and customers, and cybersecurity risks posed by remote operations from hackers and fraudsters. The SEC has reemphasized that its long-standing focus on cybersecurity and resiliency within the securities industry will continue, including ongoing vigilance over companies’ efforts to identify, assess, and address the inherent, heightened cybersecurity risks of teleworking and the resource reallocation that business need to sustain their operations until a safe and effective vaccine is developed for COVID-19. Originality/value Expert analysis and guidance from experienced lawyers with expertise in securities, litigation, government enforcement, information technology, data protection, privacy and cybersecurity.

scholarly journals The Effects of Securities Class Action Litigation on Corporate Liquidity and Investment Policy

2015 ◽  
Vol 50 (1-2) ◽  
pp. 251-275 ◽  
Author(s):  
Matteo Arena ◽  
Brandon Julio
Keyword(s):  
Investment Decisions ◽  
Market Value ◽  
Corporate Investment ◽  
Class Action ◽  
Investment Policy ◽  
Capital Expenditures ◽  
Litigation Risk ◽  
Securities Litigation ◽  
Corporate Liquidity ◽  
Temporal Effects

AbstractThe risk of securities class action litigation alters corporate savings and investment policy. Firms with greater exposure to securities litigation hold significantly more cash in anticipation of future settlements and other related costs. The result is due to firms accumulating cash in anticipation of lawsuits and not a consequence of plaintiffs targeting firms with high cash levels. The market value of cash is lower for firms exposed to litigation risk. Corporate investment decisions are also affected by litigation risk, as firms reduce capital expenditures in response. Our results are robust to endogeneity concerns and possible spurious temporal effects.

Disclosure and the Outcome of Securities Litigation

2015 ◽  
Author(s):  
Joshua Cutler ◽  
Angela K. Davis ◽  
Kyle Peterson
Keyword(s):  
Securities Litigation

Do the Merits Matter More After Securities Litigation Reform? Evidence from Restatements, Earnings Forecasts, and Insider Trading

2004 ◽  
Author(s):  
Marilyn F. Johnson ◽  
Karen K. Nelson ◽  
Adam C. Pritchard
Keyword(s):  
Insider Trading ◽  
Earnings Forecasts ◽  
Securities Litigation

The Effect of Securities Litigation on External Financing

2013 ◽  
Author(s):  
Don M. Autore ◽  
Irena Hutton ◽  
David R. Peterson ◽  
Aimee Hoffmann Smith
Keyword(s):  
External Financing ◽  
Securities Litigation

Discontinuities and Earnings Management: Evidence from Restatements Related to Securities Litigation*

2012 ◽  
Vol 30 (1) ◽  
pp. 242-268 ◽  
Author(s):  
Dain C. Donelson ◽  
John M. Mcinnis ◽  
Richard D. Mergenthaler
Keyword(s):  
Earnings Management ◽  
Securities Litigation
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