BEGIN:VCALENDAR VERSION:2.0 PRODID:-//Talks.cam//talks.cam.ac.uk// X-WR-CALNAME:Talks.cam BEGIN:VEVENT SUMMARY:From Boilerplate to Signal: Litigation Risk and Investor Responses to Repetition in MD&\;A Disclosure - Sheryl Zhang\, Assistant Professo r\, ESSEC. DTSTART:20251022T133000Z DTEND:20251022T150000Z UID:TALK239488@talks.cam.ac.uk CONTACT:Emily Brown DESCRIPTION:A longstanding puzzle in financial reporting is why managers\, despite having the ability to make forward-looking statements in the 10-K and MD&A\, often produce highly repetitive disclosures across years that elicit muted investor reactions. We investigate whether litigation risk fo r omitting information is a missing ingredient in this equilibrium\, propo sing that when the cost of hiding bad news rises\, repetition in MD&A can itself be interpreted as good news because managers with bad news will be compelled to update their MD&A discussion to avoid legal consequences. Exp loiting the Second Circuit’s Macquarie Infrastructure v. Moab Partners r uling - which heightened liability for omissions under Item 303 - we test whether litigation risk transforms textual repetition from a sign of boile rplate into a credible signal of favourable prospects. Using a difference- in-differences design\, we show that post-ruling\, investors respond more positively to textual similarity in MD&A\, consistent with repetition beco ming more credible once bad news is more costly to conceal. Additional ana lyses reveal that post-ruling MD&A changes embed stronger information abou t future earnings and are more salient to investors\, as textual revisions are increasingly tied to shifts in tone. Cross-sectional tests show that the effects concentrate among firms in opaque information environments\, a s well as those with high proprietary costs or weaker incentives to volunt arily reveal favourable news. Overall\, our findings suggest that legal fo rces incentivising managers to disclose bad news can transform seemingly u ninformative textual repetition into a tool for credibly communicating wit h the market. LOCATION:Castle Teaching Room\, Cambridge Judge Business School END:VEVENT END:VCALENDAR