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Piling On? An Empirical Study Of Parallel Derivative Suits, Stephen J. Choi, Jessica Erickson, Adam C. Pritchard
Piling On? An Empirical Study Of Parallel Derivative Suits, Stephen J. Choi, Jessica Erickson, Adam C. Pritchard
Articles
Using a sample of all companies named as defendants in securities class actions between July 1, 2005 and December 31, 2008, we study parallel suits relying on state corporate law arising out of the same allegations as the securities class actions. We test several ways that parallel suits may add value to a securities class action. Most parallel suits target cases involving obvious indicia of wrongdoing. Moreover, we find that although a modest percentage of parallel suits are filed first, over 80 percent are filed after a securities class action (termed “follow-on” parallel suits). We find that parallel suits and, …
The Price Of Pay To Play In Securities Class Actions, Adam C. Pritchard, Stephen J. Choi, Drew T. Johnson-Skinner
The Price Of Pay To Play In Securities Class Actions, Adam C. Pritchard, Stephen J. Choi, Drew T. Johnson-Skinner
Articles
We study the effect of campaign contributions to lead plaintiffs—“pay to play”—on the level of attorney fees in securities class actions. We find that state pension funds generally pay lower attorney fees when they serve as lead plaintiffs in securities class actions than do individual investors serving in that capacity, and larger funds negotiate for lower fees. This differential disappears, however, when we control for campaign contributions made to offcials with infuence over state pension funds. This effect is most pronounced when we focus on state pension funds that receive the largest campaign contributions and that associate repeatedly as lead …
The Screening Effect Of The Private Securities Litigation Reform Act, Adam C. Pritchard, Stephen J. Choi, Karen K. Nelson
The Screening Effect Of The Private Securities Litigation Reform Act, Adam C. Pritchard, Stephen J. Choi, Karen K. Nelson
Articles
Prior research shows that the Private Securities Litigation Reform Act (PSLRA) increased the significance of merit-related factors in determining the incidence and outcomes of securities fraud class actions (Johnson et al. 2007). We examine two possible explanations for this finding: the PSLRA may have reduced the incidence of nonmeritorious litigation, or it may have changed the definition of merit, effectively precluding claims that would have survived and produced a settlement pre-PSLRA. We find no evidence that pre-PSLRA claims that settled for nuisance value would be less likely to be filed under the PSLRA regime. There is evidence, however, that pre-PSLRA …
Stoneridge Investment Partners V. Scientific-Atlanta: The Political Economy Of Securities Class Action Reform, Adam C. Pritchard
Stoneridge Investment Partners V. Scientific-Atlanta: The Political Economy Of Securities Class Action Reform, Adam C. Pritchard
Articles
I begin in Part II by explaining the wrong turn that the Court took in Basic. The Basic Court misunderstood the function of the reliance element and its relation to the question of damages. As a result, the securities class action regime established in Basic threatens draconian sanctions with limited deterrent benefit. Part III then summarizes the cases leading up to Stoneridge and analyzes the Court's reasoning in that case. In Stoneridge, like the decisions interpreting the reliance requirement of Rule 10b-5 that came before it, the Court emphasized policy implications. Sometimes policy implications are invoked to broaden the reach …
Should Congress Repeal Securities Class Action Reform?, Adam C. Pritchard
Should Congress Repeal Securities Class Action Reform?, Adam C. Pritchard
Other Publications
The Private Securities Litigation Reform Act of 1995 was designed to curtail class action lawsuits by the plaintiffs’ bar. In particular, the high-technology industry, accountants, and investment bankers thought that they had been unjustly victimized by class action lawsuits based on little more than declines in a company’s stock price. Prior to 1995, the plaintiffs’ bar had free rein to use the discovery process to troll for evidence to support its claims. Moreover, the high costs of litigation were a powerful weapon with which to coerce companies to settle claims. The plaintiffs’ bar and its allies in Congress have called …
Corporations, Shareholders' Right To Have A Dividend Declared And Paid Out Of Surplus, Horace Lafayette Wilgus
Corporations, Shareholders' Right To Have A Dividend Declared And Paid Out Of Surplus, Horace Lafayette Wilgus
Articles
In Dodge v. Ford Motor Co. (Mich. 1919), 170, N. W. 668, the questions were not new, and with one exception, the decision was not unusual, but the sums involved were enormos. The Motor Company was incorporated in 1903, under the general manufacturing incorporating act of Michigan (P. A. 232, 1903), for the manufacture and sale of automobiles, motors and devices incident to their construction and operation, with an authorized Capital Stock of $150,000-$100,000 then paid up, $49,000 in cash, $40,000 in letters patent issued and applied for, and $11,000 in machinery and contracts. In 1908 the stock was increased …