Securities fraud and corporate board turnover: New evidence from lawsuit outcomes

Christopher Baum, James G. Bohn and Atreya Chakraborty

International Review of Law and Economics, 2016, vol. 48, issue C, 14-25

Abstract: We examine the relationship between outcomes of securities fraud class action lawsuits (SFCAs) and corporate board turnover rates. Our results indicate that turnover rates for board members are higher when a firm settles a lawsuit than when a suit is dismissed. Outside director turnover is most sensitive to SFCA outcomes, perhaps reflecting reputational effects. Results demonstrate that involvement in securities fraud is costly for corporate board members.

Keywords: Corporate governance; Securities law; Securities fraud; Board turnover (search for similar items in EconPapers)
JEL-codes: G32 K22 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:irlaec:v:48:y:2016:i:c:p:14-25

DOI: 10.1016/j.irle.2016.07.001

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