Developments from the PSLRA: Beyond the Lead Plaintiff Provision in Financial Research

Abstract

Since the passage of the Private Securities Litigation Reform Act in 1995, a robust literature has analyzed the impact of the lead plaintiff provision, which made it more likely for institutional investors to take on the role of lead plaintiff. Recently, less investigated provisions in the PSLRA have had an increasingly relevant role in shareholder litigation, corporate governance, and how firms choose to go public. In this article, we review the law, finance, accounting, and economics literature to show how these other provisions have evolved over time, affecting the incentives for corporate disclosure, how firms go public, and corporate governance.