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Why Do U.S. Securities Laws Matter To Non-U.S. Firms? Evidence From Private Class-Action Lawsuits, Amar Gande, Darius P. Miller
Why Do U.S. Securities Laws Matter To Non-U.S. Firms? Evidence From Private Class-Action Lawsuits, Amar Gande, Darius P. Miller
Amar Gande
A continuing controversy is whether U.S. securities laws are enforced against foreign firms, since public enforcement actions by the SEC are infrequent and often result in insignificant penalties. We examine private enforcement actions of U.S. securities laws and find that 269 securities class-action lawsuits were filed against foreign firms from 1996 to 2008. We document the severity of the penalties imposed on foreign firms and show that while firms paid a total of $9 billion to settle lawsuits brought against them, the monetary penalties levied by the market are even larger. During the three-day period surrounding the lawsuit filing date, …