LNPENALTY ¼ Log (monetary penalty/total assets). Monetary penalty is in
dollars and total assets is in millions of dollars
EQUITY ¼ 1 if a securities lawsuit is equity issue related, 0, otherwise.
ACQUIRE ¼ 1 if a securities lawsuit is stock-for-stock acquisition related, 0,
otherwise.
INSTRAD ¼ 1 if a securities lawsuit alleges abnormal insider trading by the
CEO, 0, otherwise.
ECP (21,1) ¼ three-day cumulative abnormal returns over the three-day (21, 1)
interval beginning on the day prior to the end of class period date.
REV ¼ 1 if a sued firm misstated revenues, 0, otherwise.
CEO AGE ¼ 1 if the CEO of the sued firm is 60 years or more, 0, otherwise.
LEV ¼ Sum of long-term debt and debt in current liabilities divided by
total assets.
ROA ¼ Net income before extraordinary items and discontinued
operations divided by total assets.