On participating in litigation:
re: "I actually saw money from pending litigation on a few stocks I have held in the IRA. These were class action cases going back several years. Two securities are BK and worthless but the litigation money was a surprise."
I'll back you up with further comments. PARTICIPATE in these securities lawsuits!!!! Almost always when I read people who've lost money in a stock they've derided the lawsuit(s) that are filed. The reasons are primarily two-fold: 1)We're in a capitalistic society - you took a chance, you lost, move on, stop whining, don't blame (i.e. sue) somebody; 2)What's the point?- the so-and-so lawyers make all the money, the suits perpetuate frivolous litigation, you'll not see any of your money anyway when the thing is all settled - and that's years from now. Maybe a third underlying reason is that it takes some work to fill out the paperwork, and with more claims than settlement monies, the return amount is iffy and likely to be very small.
I've found that it is possible to get some money back. A pleasant surprise, and sometimes $$$ much more that what was expected. Of course, almost no one is made whole from their losses. Secondly, some of these people who run these sued companies, ARE crooks, and there ought to be some deterrents available to the small investor swindled/cheated/hurt by these guys' shenanigans. Having the ability to go before a judge with a complaint and having the judge find in favor of plaintiffs, is one way to deter these crumbbum managers.
Given all the positions I hold and given that a lot of these stocks are on the edge and a lot have already fallen over, I likely see more of these litigation paperwork things on my desk than many other folks. My recommendation based on my experience is this:
PARTICIPATE if you have losses and qualify to be in the class-action.
SAVE your records.
I'm just mailing back AOL-Time Warner and they wanted info. going back to 1999; Fleming is on my desk now, and they want info. back to 2001. I tossed out Computer Associates forms yesterday- I have gain on my sales transaction, so I wasn't damaged with losses, and so I don't believe I qualify. EDS came in today's mail. Geez- that is a bunch. Maybe the filings are seasonal, end-of year?? Merry Christmas from the lawyers? -gg-
There's some tax stuff too which I'm not qualified to discuss. For example, monies received from a lawsuit from stock that was in an IRA are now received outside the IRA. Does or can the money go back in, and/or is there a federal and/or state tax consequence - if so how is it calculated and where is it reported? etc. etc. Ugly stuff. That's why somebody might want to have a tax accountant to help them with these issues.
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