Just lurking here but this suit that you cited will hopefully be a trend as courts start to realize that these suits are filed at the drop of a hat, usually when there is a drop in price. It's very easy to come up with surface allegations and filing these things is easy and cheap. The boilerplate is ready to go. We've seen on these boards that shorts may be involved in getting the attorneys to be aware and even soliciting potential plaintiffs. This activity, in my opinion, may expose attorneys to allegations of manipulative activity in conjunction with those that run the cases to them.
In my opinion, once more courts start awarding attorneys fees to innocent corporations, then we will see class action suits with more merit. I am not saying there is not a need for class action suits. However, I'd love to see them filed against management that takes advantage of shareholders, commits fraud, unfairly dilutes common, creates perks and packages, poison pills and anti-takeover tactics to hide incompetence or down right self-dealing, etc. Those are hard cases and my fellow lawyers prefer the ones that are easy, i.e., get out the boilerplate, rush to the court, pay the small filing fee, generate hours with discovery, settle for a few pennies for shareholders, and walk away with very large 6 and 7 figure legal fees. |
