Abstract. Securities class actions are considered to be a prominent tool to create a deterrence
impact on companies whose wrongdoing has affected their stock prices. Inspired from fraud-market
theory, securities class actions do protect small and large investors. It becomes critically important to
understand the factors that could impact the outcomes in these lawsuits. This research aims to
examine the determinants of settlements specially in securities class actions. The study utilizes a
hand-collected data set of 1,241 cases, to analyses the impact of variables that are related to case
merit, defendant strength and judicial proceedings. The findings reveal that meritorious lawsuits
have higher chances of resulting in a settlement outcome. On the other hand, the market valuation of
the defending firm reduces these chances. Judicial experience has a positive influence on
facilitating settlements. These conclusions contribute to a better understanding of the factors
influencing the settlement outcome and can help in promoting informed policy decisions to stimulate
settlement outcomes in such class actions.
Keywords : Event Study, Settlement, Class actions, Securities fraud, Logistic Regression
JEL codes : D53, G14, K22, K41

Consulter ce document sur HAL  : https://hal.science/hal-05045412v1