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A private right of action is not expressly mentioned in either §10(b) or Rule 10b-5 of the Securities Exchange Act of 1934, and hence such a right must be implied. To justify a reasonable cause of action, the plaintiff must prove: (1) a material omission or misstatement; (2) made by the defendant with “scienter” (defined later); (3) which was the actual and proximate cause of injury to the plaintiff; (4) and was relied upon by the plaintiff.³ To reach the issue of damages, defendants’ liability in terms of satisfying the above four elements must be assumed.

This study investigates the relation between lawsuit attributes that support an inference of fraud and the probability and the size of securities lawsuit settlement. A sample of 607 securities lawsuits between 1996 and 2006 is used in the analysis of the probability of settlement and a subsample of 261 lawsuit settlements is used in the analysis of the size of settlement. The empirical results indicate a positive association between the probability of a settlement and accounting irregularity, SEC enforcement action and stock offer. Accounting irregularity and SEC enforcement action are also documented to be positively related to the size of the settlement. The results imply that a stock offer supports a strong inference of fraud and the presence of accounting irregularity and SEC enforcement action in a lawsuit filing strengthens the fraud allegation and increases the likelihood of a settlement. The findings also suggest that the stronger the inference of fraud, the greater the size of the settlement. The results of this study add to our understanding of the determinants of securities lawsuit settlement. Studies using securities litigation as a proxy for fraud can use the results of this study to distinguish between fraud-related and nonfraud-related lawsuits.

The purpose of this paper is to investigate the trading patterns of corporate insiders, both managing and non-managing, around the announcement dates of securities class action lawsuits and related legal settlements.

The authors use market model event study methodology to examine the impact of class action litigation and settlement announcements on the stock prices of sued firms. The authors then determine the extent of abnormal insider trading surrounding such announcements by comparing insider trading activity (volume and transaction counts) to prior insider trading in the same firm, and to a matched sample of firms not experiencing such litigation announcements. A multivariate framework is utilized to provide further insight into the determinants of such abnormal insider trading.

The authors establish that class action litigation and settlement announcements have a significant impact on the stock prices of sued firms, and that foreknowledge of these events appears to be used by insiders to earn abnormal profits. Moreover, results indicate that managing insiders exhibit higher opportunistic abnormal trading activity than non-managing insiders. Multivariate analysis shows that size, prior firm returns, and the implementation of the Sarbanes-Oxley Act are important determinants of such insider trading.

This appears to be the first paper to analyze insider trading surrounding class action settlement announcements, and raises concerns about the ethical conduct of certain insider groups while highlighting the importance of access to private information, even amongst insiders themselves.

The purpose of this paper is to examine the hypothesis that a period of sustained supernormal firm performance (for up to five years before fraud commission) creates financial pressure on actors/agents so they have a propensity to behave fraudulently to keep the good times (apparently) rolling.

Applying the Fama and French (1993) three-factor model using a range of calendar time portfolio methodologies, the authors measure abnormal drifts in stock performance in periods up to five years before alleged fraud commission dates. The authors examine a sample of 561 US firms subject to enforcement actions initiated by the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) over 1968-2009.

The authors find that sustained firm-specific positive stock price performance for up to five years followed by the almost inevitable adverse shock, which eventually brings the good times to an end, generally precedes corporate fraud. Fraud occurs when firm managers engage in misconduct in a misguided attempt to keep the good times (apparently) rolling despite the negative shock.

The sample is restricted to firms with trading histories on the stock market prior to the misconduct, and to firms contained in the Federal Securities Regulation database of US firms subject to enforcement actions initiated by the SEC and the DOJ over 1968-2009.

The desire to keep the good times rolling appears to be a very important driver of fraudulent behavior, even after controlling for the executive compensation incentive effects and business cycle effects emphasized in prior studies. The robust findings of positive abnormal returns for up to five years preceding initial fraud commission suggest that regulators and investors would be well-advised to scrutinize the behavior of firms that exhibit surprisingly persistent superior performance over an extended period. If the financial results appear too good to be true, a closer examination might just reveal that they indeed are.

While most investors generally like to see the “good times keep rolling” this pressure can create ethical dilemmas for managers.

Unlike most other papers in this area of the literature, which concentrate on the pre-fraud disclosure, the authors investigate the firm’s performance in the pre-fraud commission period. The authors find that the commission of the alleged fraud is preceded by a sustained period of surprisingly good performance of up to five years in length. The authors believe that the paper provides empirical evidence that supports the hypothesis that a period of sustained supernormal firm performance (for up to five years before fraud commission) creates financial pressure on actors/agents so they have a propensity to behave fraudulently to keep the good times (apparently) rolling.

An analysis of the defense of these cases contrasting them to similar cases on the equity side. The authors explore some technical and real defenses that are uniquely applicable to the commodity futures world.

The migration approach to credit risk measurement is based on historic rates of movements of individual loans among the classes of a lender’s risk‐rating or credit‐scoring system. This article applies the migration concept to farm‐level data from Illinois to estimate migration rates for a farmer’s credit score and other performance measures under different time‐averaging approaches. Empirical results suggest greater stability in rating migrations for longer time‐averaging periods (although less stable than bond migrations), and for the credit score criterion versus ROE and repayment capacity.

Logistic regression techniques for panel data are used to identify factors affecting farm credit transition probabilities. Results indicate that most farm‐specific factors do not have adequate explanatory influence on the probability of farm credit risk transition. Class upgrade probabilities are more significantly affected by changes in certain macroeconomic factors, such as economic growth signals (from changes in stock price indexes and farm real estate values) and larger money supply that relax the credit constraint. Increases in interest rates, on the other hand, negatively affect such probabilities.

A means by which a nexus can be drawn between a secondary school′s educational operations and its resource allocation is suggested. Resources associated with the school′s teaching and its learning activities are “mapped”, then compared, on a grid of the school′s curriculum arrangements. If it is a non‐government (private) school, the analysis is made by comparing average with “breakeven” class sizes; if it is a government (public) school, the analysis compares the patterns of teaching class periods with pupil periods. The analysis identifies implicit resource cross‐subsidisation among groups of students who take different levels and types of subjects. There is no intention that cross‐subsidisation should be eliminated but decision makers are challenged to justify the revealed pattern of subsidisation in terms of the educational and equity purposes of their school.

This chapter reports on the results from several extended qualitative investigations of co-teaching in science and social studies content area classes, on both elementary and secondary levels. In these investigations, co-teaching partners were studied and interviewed over several years, with the view of uncovering attitudes and procedures closely associated with successful collaborative partnerships. In some cases, these investigations took place in the context of implementation of research-based instructional strategies. Analysis of data from these investigations revealed that there was considerable variability in the way co-teaching practices were implemented, the attitudes toward co-teaching expressed by teachers, and the success of the co-teaching partnerships. It was thought that several variables, including content expertise, concerns for high-stakes testing, and the personal compatibility of co-teachers played an important role in the success of the co-teaching relationship.

The purpose of this paper is to study the impact of learning effect and demand uncertainty on aggregate production planning (APP), provide practitioners with some important managerial implications for improving production planning and productivity.

Motivated by the background of one labour-intensive manufacturing firm – a mosquito expellant factory – an APP model considering workforce learning effect and demand uncertainty is established. Numerical example and comparison with other two models without considering learning and uncertainty of demand are conducted.

The result shows that taking into account the uncertain demand and learning effect can reduce total production cost and increase flexibility of APP.

Managerial implications are provided for practitioners with four propositions on improving workforce learning effect, i.e. emphasizing employee training, combing individual and organizational learning and reduction of forgetting effect.

This paper has practice value in improving APP in labor-intensive manufacturing.