Excerpt from paper which was interesting > Finally, managers often pursue conduct that harms outside victims (whether by shoddy manufacturing, false advertisin

Excerpt from paper which was interesting > Finally, managers often pursue conduct that harms outside victims (whether by shoddy manufacturing, false advertising, or negligent safety measures) in order to bolster their share price. The fact that investor lawsuits under these circumstances are likely to be more successful and lucrative may reinforce shareholders’ potential preference for managers to continue externalizing costs to third parties, on the assumption that if the management is not caught, their shares will increase in value, and if the management is caught, they will be able to recoup at least some of their losses through settlements after the fact. > [...] Moreover, securities class action settlements generally “target the wrong party for sanctions;”83typically, the firm pays the settlement while the manager who actually committed the fraud is, at worst, fired.