Massive Class Action Lawsuit Against Wall Street For Artificially Inflating Dot Com Bubble Rejected
from the go-your-own-way dept
For years and years and years, class action lawyers have had a field day with the fallout from the dot com bubble bursting, trying to pin much of the blame on Wall Street. Wall Street firms pretty clearly did some questionable things during dot com IPOs -- though, it was a pretty open secret what they were doing. They put in place deals to flip new IPOs to drive the stock price higher while also putting out only favorable research on the stocks they brought to market. It was such an open secret that anyone who did the slightest due diligence knew about it beforehand. However, part of what happened was that in the mad greedy rush to cash in on the bubble, no one cared. They knew it -- but didn't care as long as it made them rich. Then, the bubble collapsed and they wanted to find someone to blame. So, while it's a good thing that efforts have been made to stop firms from doing these types of things again (though, it still happens in slightly modified ways), many of the class action lawsuits that were filed in the wake of the bubble bursting were obviously more about trying to pass the blame, rather than accept the fact that everyone knew they were investing in duds, but were playing the game because it was making so many other people money. Most people weren't really being deceived -- and if anyone was deceiving them, it was probably themselves. That's why it's probably a good thing that a huge (perhaps largest ever) class action lawsuit against many of the top Wall Street firm has been rejected. There may still be separate lawsuits against individual banks, but there won't be a massive class action suit to tie them all together. Again, this is probably for the best. People who invested their money should know to have done their own due diligence while also recognizing that these were highly risky investments. While the firms were clearly misleading in some of their activities, and should have those practices stopped, to place all the blame on them isn't right either. A successful class action lawsuit would have put all the punishment on these firms, and then shifted money from them mainly to the lawyers on the case.
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Well....
Morgan Chase agreed to settle its part of the lawsuit for $425 million, but that could possibly now be revoked.
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Yeah, if they had walked away with tons of cash you wouldn't hear the belly aching. You play, you pay...
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But who?
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Re: But who?
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the firm
weiss and his former partner, bill lerach are the targets of a justice dept. probe for giving kickbacks to plaintiffs.
the idea is that, while lerach was with the firm, weiss and lerach had expert plaintiffs buy stock in companies that they felt were artificially inflating the stock price. when the stock crashed — or even just dipped really — the "plaintiff" would hire weiss and lerach as the lead counsel (because in class actions, lead counsel gets the lion's share).
milberg weiss was salivating at the thought of suing all of wall street well before the dot com bust... he could see it coming and the evidence will decide if he paid people to play the fool.
lawsuit abuse is an effing disease.
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