Testing For Materiality In Volatile Markets
Financial experts are often then called upon to examine whether a news announcement that corrected information that was previously misrepresented had a material effect on the price of a company’s stock.
To address the issue of materiality, experts and courts often rely on event studies (see for instance In re Executive Telecard Ltd. Securities Litigation, 979 F.Supp. 1021 (S.D.N.Y. 1997) and In re Imperial Credit Industries...
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