IPO Underpricing and Insurance against Legal Liability
检验了IPO抑价是否源于发行人规避证券法责任，发现首日高回报能降低被诉概率、败诉概率及赔偿金额。
Initial public offerings (IPOs) of equity are typically underpriced on the day of the offering. A frequently mentioned explanation for this puzzling phenomenon relies on issuers' desire to avoid legal liabilities under federal securities laws for misstatements in the offering prospectus or registration statement. According to this avoidance hypothesis, large positive returns from offer price to early after market trading reduce (i) the probability of a lawsuit, (ii) the conditional probability of an adverse judgment if a lawsuit is filed, and (iii) the amount of damages in the event of an adverse judgment.