“Securities Class Actions Mostly Punish Shareholders, Study Finds”

“A new study in the Financial Analysts Journal casts serious doubt on the premise [of litigation social efficiency], at least when it comes to shareholder class actions. In most cases, the authors found, the litigation mainly serves to punish shareholders who have already suffered from a downturn in their stock. Only suits targeting illegal insider trading, and to a lesser extent, accounting fraud were associated with subsequent higher long-term returns.” [Dan Fisher, Forbes; Rob Bauer and Robin Braun, “Misdeeds Matter: Long-Term Stock Performance after the Filing of Class-Action Lawsuits”] More: Coyote.


  • Well, duh. ex post facto securities actions are like punishing the chickens because a weasel got in the coop.

  • And then there’s the lawyerly badger, just waiting to scarf up what’s left of the chickens and the weasels.

  • They had to do a new study to find this out? I could have told them for free!