Getting Back to the Source: A New Approach to Measuring Ex Ante Litigation Risk Using Plaintiff-Lawyer Views of SEC Filings Academic Article

abstract

• Abstract This study introduces a new measure of ex ante litigation risk using scrutiny of SEC filings by the source of securities litigation (plaintiffs lawyers) to reduce measurement error, relative to existing measures. We show that plaintiff-lawyer views proxy for the largely unobservable factors that make firms more likely to face litigation risk. Lagged views precede the public bad news revelation that triggers litigation and predicts future realized litigation risk (i.e., securities class actions filings and plaintiff-lawyer investigations) and stock market outcomes. Finally, we provide new insights into the plaintiff-lawyer case selection process that otherwise cannot be observed.

authors

• Kartapanis, Antonis
• Yust, Christopher

published proceedings

• JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS

altmetric score

• 1

author list (cited authors)

• Kartapanis, A., & Yust, C. G.

citation count

• 0

complete list of authors

• Kartapanis, Antonis||Yust, Christopher G

publication date

• October 2022

publisher

• Cambridge University Press (CUP)  Publisher

published in

• Journal of Financial and Quantitative Analysis  Journal

keywords

• 35 Commerce, Management, Tourism And Services
• 3501 Accounting, Auditing And Accountability
• 3502 Banking, Finance And Investment

Digital Object Identifier (DOI)

• 10.1017/S0022109022001508

start page

• 1

end page

• 44

URL

• http://dx.doi.org/10.1017/s0022109022001508