Stock Ownership of Federal Judges and its Impact on Corporations

April Knill, Joseph "Fred" Kindelsperger and Alexei Ovtchinnikov
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Joseph "Fred" Kindelsperger: Florida State University - Department of Finance

No 1443, HEC Research Papers Series from HEC Paris

Abstract: We analyze conflicts of interests of federal judges in corporate litigation. Judges who own stock in industry peer firms of corporate litigants are more likely to render judgments benefiting those litigants. Specifically, in cases where litigants are defendants (plaintiffs), judge peer stock ownership is associated with a lower (higher) likelihood of a judgment for the plaintiff, nonmonetary awards, multiple awards, and a smaller (larger) amount awarded to the plaintiff. We show that our results cannot be explained by the judges’ superior industry knowledge stemming from their stock ownership. The results underscore the importance of mandates governing judge stock ownership.

Keywords: judge; stock ownership; peer; impartiality; litigation; justice (search for similar items in EconPapers)
JEL-codes: D63 D73 G11 G18 G38 K41 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2021-10-27
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Working Paper: Stock Ownership of Federal Judges and its Impact on Corporations (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1443

DOI: 10.2139/ssrn.3951325

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