|
PureBytes Links
Trading Reference Links
|
> Reality Check #1: When investors in an IPO see their investment
> rapidly nosedive in value, they feel cheated. A law suit is a common
> consequence of this type of event. Some of these suits have merit
> and some don't (I guess that's always true). The legal system will
> sort it out. This is not unique to Omega.
There is a class of scummy law firms who specialize in this kind of class
action suit. All the forms, motions, etc. are fill-in-the-blanks from
already prepared boiler plate. These lawyers are the corporate
equivalent to ambulence chasers and are in it solely to build legal
fees. If you check it out, I am sure you will find that the
plaintiff's law firm has a history of this kind of lawsuit.
Fortunately, there is currently some backlash against these
kind of fees.
> Reality Check #2: A law suit has been filed claiming
> misrepresentations in the prospectus. When, in the history of the
> world, has the underwriter, who prepared the prospectus, ever come
> forward and said anything other than "the suit has no merit."
The question is, when did an underwriter not know how to prepare a
prospectus. These law firms look for this kind of situation and then
find some stupid shareholder to front the suit. What usually happens
is that there is an out-of-court settlement in which the filling law
firm gets a nice, plump fee, the company law firm gets a nice, plump
fee and the shareholders get bubkis. The wrinkle is that the settlement
wipes the slate clean for the company.
Unless a shareholder opted out of the class action, no further suits
can be brought.
> Reality Check #3: A law suit has two sides to it. The attorneys for
> each side usually tell their clients they have a great case. They're
> wrong half the time.
There aren't two sides, there are two law firms. They each get paid
the big bucks. Who does the paying? The company, i.e., the
shareholders. I think they teach this kind of round-robbing in law
school.
I agree with Harry Truman, who suggested that, for the good of the
nation, lawyers be prevented from serving in Congress.
JFB
Shaven Heads Trading
NYC
|