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A lot of what you say is true - in general. That doesn't mean it's true in
this case (I don't know all the facts - and I suspect you don't either). BTW
- I don't agree that all the lawyers involved in this kind of practice are
scummy. In fact - the firm that's probably most well known (and despised by
many) - Milberg, Weiss - even has a great web site - complete with stock
charts (the charts don't show things like trend lines - they show where
insiders bought and sold <g>). FWIW - I've had occasion to deal with
Milberg, Weiss recently in the context of being a prospective plaintiff in a
securities case - and I was extremely impressed by the level of knowledge -
and the professionalism of the firm (and I am not easily impressed). Robyn
John F. Berentson wrote:
> > 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
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