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.
Which genre of litigation was better at deterring executive fraud? The parallel litigation, which includes private securities class actions, is positively associated with the forced departure of stock option backdating fraudster executives.
Of the 151 stock option backdating litigation observations, 53 were parallel (they included both private securities class actions and derivative lawsuits) and 98 were derivative-only.
Yet, despite some isolated efforts to hire and retain more female attorneys and promote more women into partnership, little tangible progress has been made to improve the position of women in the profession…
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).
This provides a unique research opportunity to compare parallel litigation to derivative lawsuits.
The reason the stock option backdating litigation was comprised of both derivative lawsuits and private securities class actions is that the stock option backdating litigation could be viewed as appropriate for either genre of litigation.
Law360 (June 15, 2009, AM EDT) -- Former directors of defense contractor Engineered Support Systems Inc. District Court for the Eastern District of Missouri from the Circuit Court for the City of St.
backdated stock options, and the directors of a rival that merged with ESSI and global accounting firm Pricewaterhouse Coopers covered up the fraud, a putative class action lawsuit claims. Louis Monday, the potential class members claim that Michael F.
Thus the stock option backdating litigation could be viewed as appropriate for a private securities class action, except that often the materiality of the resulting overstatement of net income and earnings per share was debatable.
The classic derivative lawsuit provides redress to the wrongs suffered by the corporation.
won dismissal of a shareholder lawsuit claiming company officers including Chief Executive Officer Steve Jobs were overpaid with illegally backdated option awards,” Joel Rosenblatt reports for Bloomberg. Apple, maker of the i Pod and i Phone music-and-video players, said last year that 6,428 stock-option grants issued between 19 were backdated,” Rosenblatt reports.