In contrast, 65% of the litigation observations were derivative lawsuits (without any private securities class actions).This provides a unique research opportunity to compare parallel litigation to derivative lawsuits.
A percentage of the recoveries was given to the plaintiff attorneys.
Quote Stuffing A practice of placing an unusual number of buy or sell orders on a particular security and then immediately canceling them.
This can create confusion in the market and trading opportunities for...
Interestingly, the larger the monetary recovery given directly to the shareholders, the more likely the fraudster executives were forced to depart their companies.
These results were significant in multiple regression with control variables, at a probability value of .067.
In this study, Securities Class Actions Compared to Derivative Lawsuits: Evidence from the Stock Option Backdating Litigation on their Relative Disciplining of Fraudster Executives, 35% of the 151 stock option backdating litigation observations included private securities class actions (in addition to derivative lawsuits).
In other words, 35% of the litigation observations were parallel.These results complement those of Choi and Pritchard (“SEC Investigations and Securities Class Actions: An Empirical Comparison,” , Vol.13, March 2016), who found evidence that securities class actions are more effective than SEC enforcement actions at forcing out fraudster executives. The results of this study, as well as the Choi and Pritchard study, suggest that maintaining the viability of private securities class actions is essential for deterring executive fraud. Fuerman, Associate Professor at the Sawyer Business School at Suffolk University.That is embezzlement or larceny and fraudulent behavior and improper governance that took assets away from the corporation.Thus, it could be viewed as the bailiwick of a derivative lawsuit, which addresses wrongs to the corporation.55%, the fraudster executives were forced to depart their companies.