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We examine the relation between disclosure tone and shareholder litigation for a sample of firms involved in class action securities litigation. Specifically, we use text analysis software to investigate whether sued firms' earnings announcements are systematically more optimistic in tone than a sample of non-sued firms in similar economic circumstances and industries. We find that disclosures issued by sued firms during the class action damage period are significantly more optimistic thandoi:10.2139/ssrn.1331608 fatcat:nurn6sehozffvcc4cn77dznecu