This paper explores the financial implications of corporate fraud by examining the impact of corporate fraud on fraudulent firms’ external financing cost and corporate cash holdings. Using a sample consist of 184 fraudulent firms that experience material litigation in securities class action, we find that firms’ cost of debt significantly increases associated with corporate fraud incident. In line with the costly external financing evidence, fraudulent firms accumulate more cash to keep liquidity and avoid underinvestment issues. Consistent with the precautionary motive argument, the value of cash increases after corporate fraud. In addition, corporate fraud contributes to financial constrains in the sense that fraudulent firms display a positive cash flow sensitivity of cash after corporate fraud. Our result indicates that corporate fraud can have a real impact on corporate outcomes by affecting the external financing cost and internal cash holdings.