Private Litigation Costs and Voluntary Disclosure: Evidence from theMorrisonRuling Journal Article uri icon



  • ABSTRACTWe examine the causal effect of expected private litigation costs on voluntary disclosure using a natural experiment, the Supreme Court ruling in Morrison v. National Australia Bank. Even though this ruling had no effect on what constituted fraudulent conduct for the purpose of securities litigation, it significantly reduced the expected private litigation costs for foreign cross-listed firms by reducing the pool of potential claimants. It did so by eliminating the right of shareholders who purchased shares on non-U.S. exchanges from seeking compensation in U.S. courts. In the post-Morrison period, we find consistent evidence showing a decrease in voluntary disclosure using analyses that exploit the varying impact of the ruling based on both firm- and country-level attributes. Unlike a number of prior studies, we find that the positive relation between litigation and disclosure does not depend on the direction of the news.JEL Classifications: G15; G18; M41.Data Availability: Data are available from the public sources cited in the text.

publication date

  • May 1, 2019

has restriction

  • closed

Date in CU Experts

  • January 14, 2020 9:45 AM

Full Author List

  • Naughton JP; Rusticus TO; Wang C; Yeung I

author count

  • 4

Other Profiles

International Standard Serial Number (ISSN)

  • 0001-4826

Electronic International Standard Serial Number (EISSN)

  • 1558-7967

Additional Document Info

start page

  • 303

end page

  • 327


  • 94


  • 3