Just Friends? Managers' Connections to Judges

Sterling Huang, Sugata Roychowdhury, Ewa Sletten, Yanping Xu
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Abstract

We study the impact of social connections between judges and executives on the outcomes of Securities Class Action Litigation (SCAL). Judges who are socially connected to a firm's executives are significantly more likely to dismiss lawsuits against the firm. There is also evidence of faster resolution and lower payout amounts in connected cases. The favorable outcomes cannot be explained by the lower severity of connected cases, or by court, judge, or firm characteristics. Our results are more pronounced when executives connected to the judge are named defendants in the lawsuits, when connected cases involve less visible lawsuits or firms, and when connections between judges and executives are likely more direct. Our evidence indicates that social connections influence judge impartiality and meaningfully alter SCAL outcomes.
只是朋友?管理人员与法官的关系
我们研究了法官与高管之间的社会关系对证券集体诉讼(SCAL)结果的影响。与公司高管有社交关系的法官更有可能驳回针对公司的诉讼。还有证据表明,有关系的案件解决速度更快,赔付金额更低。关联案件的严重程度较低,或者法院、法官或公司的特征都无法解释这种有利的结果。当与法官有关联的高管在诉讼中被列为被告时,当关联案件涉及的诉讼或公司知名度较低时,以及当法官与高管之间的关联可能更为直接时,我们的研究结果会更加明显。我们的证据表明,社会关系会影响法官的公正性,并有意义地改变 SCAL 的结果。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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