Securities litigation is relatively rare but can significantly affect sued firms. We extend this research by examining the spillover effect of securities litigation on industry peers using a sample of disclosure-related litigation—distinct from events such as restatements and SEC enforcement. We find investors respond immediately as peers exhibit negative abnormal returns before and after case filings. Additionally, peers provide more voluntary earnings and sales forecasts. Notably, investors and peers respond primarily to cases that eventually settle, where litigation costs are concentrated. Further, disclosure results are concentrated in growth firms, where voluntary disclosure is most important, and in low litigation industries, where litigation is more noteworthy. Peers also adjust attributes of mandatory disclosures: disclosures become shorter, more readable, and contain fewer litigation-related terms. These changes appear successful as peers have lower future litigation incidence. Collectively, our findings indicate securities litigation has significant effects beyond the firms that directly face litigation.

中文翻译：

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披露相关证券诉讼中的溢出效应

证券诉讼相对较少，但会对被诉公司产生重大影响。我们通过使用与披露相关的诉讼样本来检验证券诉讼对行业同行的溢出效应来扩展这项研究——这与重述和 SEC 执法等事件不同。我们发现投资者会立即做出反应，因为同行在立案前后都表现出负的异常回报。此外，同行提供更多自愿的收益和销售预测。值得注意的是，投资者和同行主要对最终解决的案件做出反应，诉讼成本集中在这些案件中。此外，披露结果集中在自愿披露最重要的成长型公司和诉讼更值得注意的低诉讼行业。同行也调整强制披露的属性：披露变得更短、更易读，并且包含更少的诉讼相关条款。这些变化似乎是成功的，因为同行的未来诉讼发生率较低。总的来说，我们的研究结果表明，证券诉讼的影响超出了直接面临诉讼的公司。