Laws and Statutes →

The Changing Landscape of Auditor Litigation and Its Implications for Audit Quality

Data from 1996 to 2016 shows that shareholder litigation against auditors has declined in recent years. Empirical evidence shows that Rule 10b-5, the Securities Act statute used for class action lawsuits, has lost its bite for use against auditors. This decline is driven, at least in part, by the US Supreme Court’s narrowing of liability standards. These findings suggest weakened shareholder protection with profound implications for investors.

The Creation and Evolution of Entrepreneurial Public Markets

Since 1990, new stock exchanges geared toward fast-growing, entrepreneurial companies have proliferated around the world. This analysis shows that exchanges in countries with better shareholder protection allowed younger and less profitable companies to raise more capital. These markets alone cannot boost entrepreneurial activity but need enabling institutions.

Handgun Waiting Periods Prevent Hundreds of Homicides Each Year

Waiting-period laws reduce gun-related homicides by 17 percent and gun-related suicides by up to 11 percent, according to a study by Deepak Malhotra, Michael Luca, and Christopher Poliquin. Open for comment; 0 Comments.

Tort Reform and Innovation

This paper investigates how tort reforms might affect the development of new medical device technologies. The authors find that caps on non-economic damages (such as pain and suffering) are associated with an average decline in patenting for medical instrument technologies. The effect, however, is highly varied and depends on the characteristics of both the devices and the medical fields.