Supreme Court Moves To Limit Shareholder Class-Action Lawsuits

from the no-refunds-on-stock-losses dept

Thu, Jun 21st 2007 4:41pm — Joseph Weisenthal

The Supreme Court is on a roll. Earlier this week, it shot down an antitrust lawsuit against Wall St. banks for their role in dot-com IPOs. As with most lawsuits stemming from that period, this case seemed mostly about disgruntled investors wanting to blame someone for their losses. Now the Court has handed down another decision that should please the market. In an 8-1 ruling, the Court ruled that if you bring a class action securities lawsuit against a firm, you must supply evidence that corporate officers actually were engaged in or had knowledge of some sort of securities fraud. You can't just sue cause your stock went down and you want somebody's neck to wring. Unfortunately, it sounds like lawyers will find loopholes in the ruling, ensuring that these silly lawsuits will probably continue. But seeing as the only winners in these cases are the lawyers, anything that mitigates them should be good for companies, investors and customers, who end up paying the price of all this litigation in the goods they buy.

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Overcast, 21 Jun 2007 @ 5:41pm

So... it's ok to sue a Doctor into oblivion for just about anything, but not a bank?

WTF???
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Anonymous Coward, 21 Jun 2007 @ 6:24pm

Damn, and I was thinking of suing the investors of dot.com companies who got out before the bubble burst because they pushed the stock price up initially and got me to invest and then left before I did. Oh well.
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Anonymous Coward, 21 Jun 2007 @ 7:16pm

haha google ads brought up "Class Action Lawsuits" and "Bought a defective item?"

both for litigation.

haha
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Michael, 21 Jun 2007 @ 7:18pm

Life vs Money
I know your probably American, but I'll say this anyway, Doctors deal in life and health issues, which are vastly more important than money or stocks, and if you couldn't sue a doctor they would really have little reason to perform to the best of their abilities, because the hospital boards sure as hell won't make them. I live in Canada where you not only can't sue your doctor, but you can't sue your employer either thanks to the Workers Compensation Board that they can hide behind, who will basically screw you over give you a tiny amount of money then leave you to rot.
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