Does the Threat of Securities Class Actions Add Value for Shareholders? Evidence from China
Reynolds Holding
MAY 17, 2022
Second, the potential discipline and deterrence of SCA to individual wrongdoers can be undermined if most cases are settled out of court prior to trial, and the settlement costs are largely covered by D&O insurance. Put another way, reducing SCA risk can be beneficial, particularly for growth firms with risky investment opportunities.
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