Shareholder litigation rights and stock price crash risk

We study the impact of shareholder-initiated litigation risk on a firm's stock price crash risk. Our empirical analysis takes advantage staggered adoption universal demand laws, which led to an exogenous decline in derivative find that threat reduces and information hoarding associated with earnings management is channel through affects The relationship also moderated by how exposed firms are other primary form shareholder litigation, namely securities class-action lawsuits. • reduced leads future use laws as shock A management.