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The purpose of this paper is to examine how the filing of a securities class action, and associated corrective actions taken by management, impact the operating performance of sued firms.

A matched sample is formed three years prior to the filing of a class action, as opposed to the traditional one year used in the literature. Match adjusted performance is analyzed from three years prior to the filing to five years after. Further the authors analyze the impact corrective actions have on operating performance.

The results show that operating underperformance happens considerably earlier than had hitherto been believed. Further, there is no evidence that the filing adversely affects performance, rather securities class actions appear to act as a turning point. The findings also indicate that firms that increase leverage post filing, experience subsequent increases in their operating performance.

The results show that rather than leading to a deterioration in performance, as is currently understood, the filing of a securities class actions results in improved operating performance. This improvement is, in part, associated with more optimal use of leverage by management. Overall, class actions appear to be an effective disciplinary mechanism.

The purpose of this paper is to examine the financial risks posed by energy and environmental markets and how these risks are addressed by current regulatory regimes and legislation. This assessment should be of interest to academics, practitioners, regulators and policymakers.

The first half of the paper provides a theoretical conceptualisation of the financial risks energy and environmental markets pose by drawing on established academic literatures on financial regulation and energy markets. The second half of the study provides a legislative analysis of the evolving approach to the financial regulation of energy and environmental markets. Drawing on “grey” literatures, this assessment critically appraises the array of current policy initiatives that have the potential to affect the financial regulation and operation of energy and environmental markets.

The theoretical conceptualisation of financial risks identified macroeconomic and energy systemic as the principal risks posed by energy and environmental markets. The legislative analysis contains various conclusions, prominent amongst which are: that the EU will play an increasingly important role in the financial regulation of energy and environmental markets through bodies such as ACER and ESMA; and that it is essential the boundaries of regulatory responsibility between energy and financial regulators are assessed to ensure activities leading to risk do not fall between the remits of responsibility.

There is a dearth of academic work on the financial regulation of energy and environmental markets, while prior policy and regulatory analyses have focussed on specific markets or products. This belies the interrelationships and, in some cases, the integration of these risks and the nature of financial crises. To amend for this omission we provide a holistic assessment of these legislative and policy developments.