私人证券诉讼改革法案下的集体诉讼

eScholarshipprovidesopenaccess,scholarlypublishingservicestotheUniversityofCaliforniaanddeliversadynamicresearchplatformtoscholarsworldwide.BerkeleyPrograminLawandEconomicsUCBerkeleyTitle:DotheMeritsMatterMore?ClassActionsunderthePrivateSecuritiesLitigationReformActAuthor:Johnson,MarilynF.,MichiganStateUniversity,CollegeofBusinessNelson,KarenK.,StanfordUniversitySchoolofBusinessPritchard,AdamC.,UniversityofMichiganLawSchoolPublicationDate:09-01-2002Series:BerkeleyPrograminLawandEconomics,WorkingPaperSeriesPublicationInfo:BerkeleyPrograminLawandEconomics,WorkingPaperSeries,BerkeleyPrograminLawandEconomics,UCBerkeleyPermalink::CongresspassedthePrivateSecuritiesLitigationReformActof1995inanattempttodiscouragemeritlesssecuritiesfraudclassactions.Thispaperusesdamages,accounting,insidertradingandgovernancevariablestoexplaintheincidenceofsecuritiesfraudlitigationbothbeforeandafterthepassageofthePSLRA.Usingamatchedsampleofsuedandnon-suedfirmsfromthecomputerhardwareandsoftwareindustries,wefindthataccountingandinsidertrading,whichdidnotcorrelatewiththeincidenceoflitigationpriortothepassageofthePSLRA,aresignificantafterthepassageofPSLRA.Thisfindingisconfirmedbyouranalysisofallegationsandoutcomes.Ouraccountingvariablesdonotexplaintheincidenceofpre-PSLRAaccountingallegations,buttheybecomesignificantafterthepassageofPSLRA.Similarly,insidertradingvariablesdonotexplaininsidertradingallegationsbeforethePSLRA,butnetsalesbyinsiderscorrelatewithsuchallegationsafteritsenactment.Finally,wefindnocorrelationbetweenlawsuitoutcomesandouraccountingvariablesbeforethePSLRA,butaccountingvariablesaresignificantafteritsenactment.AbnormalinsidersalescorrelatewithoutcomesbeforethePSLRA,butnotafter.Overall,weinterpretourfindingasevidencethatthePSLRAhasfurtheredCongress'goalofdiscouragingfriviloussecuritiesfraudlawsuits.CopyrightInformation:DotheMeritsMatterMore?ClassActionsunderthePrivateSecuritiesLitigationReformActMarilynF.JohnsonEliBroadCollegeofBusinessMichiganStateUniversityEastLansing,MI48824(517)[e-mail]sinessStanfordUniversityStanford,CA94305(650)[e-mail]sityofMichiganVisitingProfessorGeorgetownUniversityLawCenter600NewJerseyAve.,NWWashington,DC20001(202)[e-mail]2002/Merits22DraftWeappreciatethehelpfulcommentsofJenniferArlen,BillBeaver,RonaldMannandRobertaRomano,aswellasparticipantsattheUniversityofMichiganLawSchoolFawleyLunch,theJoeC.DavisLawandBusinessProgramConferenceattheVanderbiltUniversitySchoolofLaw,theAnnualMeetingoftheAmericanLawandEconomicsAssociation,andtheSloanInterdisciplinaryWorkshopattheGeorgetownUniversityLawCenter.DanielSpiesprovidedinvaluableresearchassistance.WethankFirstCallCorporationforinsidertradingdataandPricewaterhouseCoopersforlitigationdata.NelsongratefullyacknowledgesthefinancialsupportoftheFinancialResearchInitiativeatStanfordUniversityGraduateSchoolofBusiness;PritchardreceivedfinancialsupportfromtheCookFundattheUniversityofMichiganLawSchool.2DotheMeritsMatterMore?ClassActionsunderthePrivateSecuritiesLitigationReformActAbstract:CongresspassedthePrivateSecuritiesLitigationReformActof1995inanattempttodiscouragemeritlesssecuritiesfraudclassactions.Thispaperusesdamages,accounting,insidertradingandgovernancevariablestoexplaintheincidenceofsecuritiesfraudlitigationbothbeforeandafterthepassageofthePSLRA.Usingamatchedsampleofsuedandnon-suedfirmsfromthecomputerhardwareandsoftwareindustries,wefindthataccountingandinsidertrading,whichdidnotcorrelatewiththeincidenceoflitigationpriortothepassageofthePSLRA,aresignificantafterthepassageofthePSLRA.Thisfindingisconfirmedbyouranalysisofallegationsandoutcomes.Ouraccountingvariablesdonotexplaintheincidenceofpre-PSLRAaccountingallegations,buttheybecomesignificantafterthepassageofthePSLRA.Similarly,insidertradingvariablesdonotexplaininsidertradingallegationsbeforethePSLRA,butnetsalesbyinsiderscorrelatewithsuchallegationsafteritsenactment.Finally,wefindnocorrelationbetweenlawsuitoutcomesandouraccountingvariablesbeforethePSLRA,butaccountingvariablesaresignificantafteritsenactment.AbnormalinsidersalescorrelatewithoutcomesbeforethePSLRA,butnotafter.Overall,weinterpretourfindingsasevidencethatthePSLRAhasfurtheredCongress’sgoalofdiscouragingfrivoloussecuritiesfraudlawsuits.Keywords:Securitieslitigation,litigationrisk,accountingfraud,insidertrading.I.INTRODUCTIONDothemeritsmatterinsecuritiesfraudclassactions?Thisquestioncapturedtheattentionofbothscholars(Alexander,1991)andlegislatorsintheearly1990s(Hearings,1995).Congresseventuallyconcludedthatthepotentiallyenormousdamagesinsecuritiesfraudclassactionswereencouragingmeritless“strike”suits.InCongress’sview,plaintiffs’lawyerswerefilingsuits“citingalaundrylistofcookie-cuttercomplaints”againstcompanies“withinhoursordays”ofasubstantialdropinthecompany’sstockprice(H.R.Rep.,1995).Moreover,plaintiffs’lawyershadincentivesto“filefrivolouslawsuitsinordertoconductdiscoveryinthe