While it isn't quite the "Pre-Crime Unit" that Bruce Carton has blogged about here and here over at Securities Litigation Watch, the study does present some interesting findings.
- Companies rated in the bottom two categories ("D" or "F") are more than three times as likely to be the target of a securities class action lawsuit than those rated in the top three categories ("A," "B" or "C");
- Excessive CEO compensation appears to be the single most predictive factor of being sued; and
- Other predictive factors include director age, tenure, over-commitment and lack of independence.
- more than $485 million in market capitalization; and
- average daily trading volume for target companies in the 52 weeks before being sued was between 2 and 25 million shares
Hat tip to Broc Romanek at TheCorporateCounsel.net.