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Misdeeds Matter: Long-Term Stock Price Performance After the Filing of Class-Action Lawsuits

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The Next Generation of Responsible Investing

Part of the book series: Advances in Business Ethics Research ((ABER,volume 1))

Abstract

Consistent with theory, this study of shareholder litigation found a general transformation in company characteristics and risk exposures, as well as generally negative short- and long-term performance effects that differed substantially between two different types of allegations. The findings have important implications for both regulator and institutional investor monitoring and decision-making strategies.

This chapter is a republished article that first appeared in the Financial Analysts Journal in 2010.

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Notes

  1. 1.

    This database is available at http://securities.stanford.edu.

  2. 2.

    Available at http://mba.tuck.dartmouth.edu/pages/faculty/ken.french.

  3. 3.

    In unreported results (available upon request), we ran calendar time portfolio regressions based on both the Fama–French three-factor model and the capital asset pricing model.

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Author information

Authors and Affiliations

  1. ECCE, 6211 LM, Maastricht, The Netherlands

    Rob Bauer & Robin Braun

Authors
  1. Rob Bauer
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  2. Robin Braun
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Correspondence to Rob Bauer .

Editor information

Editors and Affiliations

  1. Carleton University, Colonel By Drive 1125, Ottawa, K1S 5B6, Ontario, Canada

    Tessa Hebb

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Bauer, R., Braun, R. (2012). Misdeeds Matter: Long-Term Stock Price Performance After the Filing of Class-Action Lawsuits. In: Hebb, T. (eds) The Next Generation of Responsible Investing. Advances in Business Ethics Research, vol 1. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-2348-1_9

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