Institutional Investors and Shareholder Litigation in New Public Companies: Do Underwriters Have an Information Advantage?

2006 ◽  
Author(s):  
Sergey Barabanov ◽  
Onem Ozocak ◽  
Thomas John Walker
Keyword(s):  
Institutional Investors ◽  
Public Companies ◽  
Shareholder Litigation ◽  
New Public ◽  
Information Advantage

14. Meetings and investor engagement

Company Law ◽  
2019 ◽  
pp. 339-374
Author(s):  
Lee Roach
Keyword(s):  
Financial Reporting ◽  
Institutional Investors ◽  
Majority Vote ◽  
General Meeting ◽  
Annual General ◽  
Annual General Meeting ◽  
Private Companies ◽  
Class Meeting ◽  
Public Companies ◽  
The Uk

This chapter examines the role and importance of general meetings, the significant body of procedural rules by which general meetings are run, and the extent to which a company's members actually engage with general meetings. Members make decisions in one of two ways: through a resolution or by unanimous assent. A resolution is simply a vote that requires a specified majority vote in its favour in order to be passed. The resolutions of public companies must be passed at meetings, whereas resolutions of private companies can be passed at meetings or via a written resolution. Two forms of general meeting existed: the annual general meeting and extraordinary general meetings. In some cases, however, companies are required to hold a class meeting in which only one class of member is entitled to attend. To encourage institutional investors to engage more, the Financial Reporting Council (FRC) has published the UK Stewardship Code.

Product Development Problems in 1987—A Diagnosis

1987 ◽  
Vol 201 (3) ◽  
pp. 191-196
Author(s):  
E W S Ashton
Keyword(s):  
Product Development ◽  
Institutional Investors ◽  
Public Companies

A set of ‘rules’ is suggested to cover the present limitations imposed on product development in public companies by the requirement of institutional investors for regularly increasing profits.

The Influence of Analysts, Institutional Investors, and Insiders on the Incorporation of Market, Industry, and Firm-Specific Information into Stock Prices

2004 ◽  
Vol 79 (4) ◽  
pp. 1119-1151 ◽  
Author(s):  
Joseph D. Piotroski ◽  
Darren T. Roulstone
Keyword(s):  
Institutional Investors ◽  
Stock Prices ◽  
Stock Return ◽  
Relevant Information ◽  
Specific Information ◽  
Specific Component ◽  
Future Earnings ◽  
Industry Level ◽  
Level Information ◽  
Information Advantage

We investigate the extent to which the trading and trade-generating activities of three informed market participants—financial analysts, institutional investors, and insiders—influence the relative amount of firm-specific, industry-level, and market-level information impounded into stock prices, as measured by stock return synchronicity. We find that stock return synchronicity is positively associated with analyst forecasting activities, consistent with analysts increasing the amount of industry-level information in prices through intra-industry information transfers. In contrast, stock return synchronicity is inversely related to insider trades, consistent with these transactions conveying firm-specific information. Supplemental tests show that insider and institutional trading accelerate the incorporation of the firm-specific component of future earnings news into prices alone, while analyst forecasting activity accelerates both the industry and firm-specific component of future earnings news. Our results suggest that all three parties influence the firm's information environment, but the type of price-relevant information conveyed by their activities depends on each party's relative information advantage.

The Evolution in the U.S. of Private Enforcement via Litigation and Monitoring Techniques

2015 ◽  
Author(s):  
James D. Cox ◽  
Randall S. Thomas
Keyword(s):  
United States ◽  
Hedge Funds ◽  
Hedge Fund ◽  
The United States ◽  
Private Enforcement ◽  
Governance System ◽  
Public Companies ◽  
Shareholder Litigation ◽  
Corporate Governance System

This chapter examines the evolution of private enforcement in the United States and the lessons that can be learned by German public companies from the experiences of their US counterparts. It first looks at the place of representative shareholder litigation within the US corporate governance system before turning to the broad-based criticisms against all forms of representative shareholder litigation on the grounds of excessive litigation agency costs. It then discusses the role of shareholder derivative suits in remedying breaches of duty of loyalty, along with the use of hedge funds in shareholder monitoring. It explores the increasing role of appraisal remedy against the backdrop of developments in shareholder litigation focused on acquisitions, and highlights the limitations of hedge fund activism. Finally, it assesses the implications of shareholder monitoring mechanisms in the United States for shareholders in Germany.

Changes in ownership forms and role of institutional investors in governing public companies in Malaysia

2015 ◽  
Vol 11 (4) ◽  
pp. 455-475 ◽  
Author(s):  
Hairul Azlan Annuar
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Institutional Investor ◽  
Governance System ◽  
Public Companies ◽  
Content Type ◽  
Investment Companies ◽  
Corporate Governance System ◽  
Different Types

Purpose – The purpose of this paper is to ascertain whether different types of institutional investor in Malaysia are involved in the corporate governance of their investee companies, and, if yes, to what extent is the level of the involvement. Design/methodology/approach – A qualitative approach, consisting of a series of interviews with 18 senior investment managers of different types of institutional investor, was chosen. Findings – The findings suggest that lessons learnt from the fallout of the Asian crisis has made Malaysian institutional investors not only to be more prudent in managing their total funds and in making equities investment decisions, but has resulted in a more active participation in their “core” investee companies apart from merely discharging their voting rights. Interview analysis revealed that government-linked investment companies are championing the cause and could possibly affect the overall level of institutional investors’ involvement, which bode well for the future of the corporate governance system of the country. Research limitations/implications – Generalisations may be an issue when interviews are used as the method of inquiry. Also, the sample is not random, as access to many managers depended on recommendations. In addition, respondents were consciously selected to obtain different types of institutional investors that included government and non-government linked. Originality/value – There is a lack of work on studying the involvement of institutional investors in developing countries, whereby previous work and literature review were predominantly based upon the experience of Western economies.

Option Backdating Announcements and Information Advantage of Institutional Investors

2018 ◽  
Vol 35 (4) ◽  
pp. 696-722 ◽  
Author(s):  
Wenli Huang ◽  
Hai Lu ◽  
Xiaolu Wang
Keyword(s):  
United States ◽  
Private Information ◽  
Institutional Investors ◽  
Information Leakage ◽  
The United States ◽  
Stock Option ◽  
Superior Performance ◽  
Second Step ◽  
Step Procedure ◽  
Information Advantage

This article uses transaction-level fund trading data from the United States to study the information advantage of institutional investors. Our research design follows a two-step procedure. In the first step, we identify funds that sell shares in firms before their unexpected revelation of stock option backdating (BD) investigations, and thus establish fund–firm pairs of interest. In the second step, we focus on trading that takes place at other times and find that the funds are more likely to make correct trades before the earnings announcements of their paired firms and that their trading performance for paired firms is better in general. This superior performance, however, is more evident in the pre-BD-announcement period and for firms whose BD investigations are initiated internally. The results imply that although institutions have access to private information on certain firms, this advantage disappears after the BD revelation, possibly due to reduced information leakage.

Who Pays Attention to SEC Form 8-K?

2021 ◽  
Author(s):  
Peter Easton ◽  
Azi Ben-Repahael ◽  
Zhi Da ◽  
Ryan Israelsen
Keyword(s):  
Institutional Investors ◽  
Media Coverage ◽  
Price Change ◽  
Traditional Media ◽  
Public Companies ◽  
Liquidity Provision ◽  
Retail Investors ◽  
Event Date ◽  
Material Information ◽  
Source Of Information

The SEC requires public companies to disclose material information on Form 8-K within four days of a triggering event. We show that, on 8-K event and filing dates, there is significant abnormal attention on Bloomberg terminals, which are a source of information for institutional investors, while traditional media attention tends to be higher on filing days.  Significant price discovery occurs on the event date and on the days between that day and the filing date. The traditional media coverage on the filing day appears to attract the attention of retail investors and leads to further price changes in the direction of the pre-filing day price change. Institutional investors exploit this price pressure via opportunistic liquidity provision. Overall, our evidence suggests that the Form 8-K filing may have little direct informational benefit, particularly to retail investors.

scholarly journals The Public Effect of Private Sustainability Reporting: Evidence from Incident-Based Engagement Strategy

2021 ◽  
Author(s):  
Natalia Semenova
Keyword(s):  
Private Information ◽  
Institutional Investors ◽  
Information Exchange ◽  
Market Value ◽  
Sustainability Reporting ◽  
Publicly Traded ◽  
Public Companies ◽  
The Public ◽  
Sustainability Performance ◽  
Unique Dataset

AbstractThis study examines whether private information exchange between institutional investors and public companies in engagement dialogs on sustainability issues improves the publicly disclosed measurements of the target company’s financial and non-financial performance and transparency. It uses a unique dataset containing 326 private reports related to environmental, social, and anti-corruption recommendations to address material incidents among publicly traded MSCI World Index portfolio companies of Nordic institutional investors. The results indicate that target companies appear to have similar values with matched companies on sustainability performance and transparency ratings in the 3 years following the initiation of private reporting. Unexpected sustainability incidents are subsequently reflected in the next year’s fall in the market value of target companies relative to MSCI World Index. This paper provides empirical evidence for the legitimacy-based provision of private sustainability information used in a larger disclosure system of public companies.

scholarly journals Asymmetric information and monitoring behaviour in block trades: An empirical analysis for Spain

2004 ◽  
Vol 2 (1) ◽  
pp. 25-37 ◽  
Author(s):  
Belén Díaz Díaz ◽  
Myriam García-Olalla
Keyword(s):  
Asymmetric Information ◽  
Empirical Analysis ◽  
Value Creation ◽  
Capital Market ◽  
Institutional Investors ◽  
Control Group ◽  
Block Trades ◽  
Two Factors ◽  
Information Advantage

The aim of our study is to analyse if the purchase of share blocks in the Spanish capital market is due to any of the two factors that have justified block transactions in financial literature: monitoring or information advantage. Our results show that the control group, institutional investors and insiders have a higher probability to buy a block when an increase in value creation is expected due to the higher monitoring of managers carried out by these investors. A higher probability of purchase, only by insiders, is also observed when there is more asymmetric information and therefore the acquirers can benefit from their position of better informed investors.

Sign in / Sign up

Export Citation Format

Share Document