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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: rrufff who wrote (86750)	5/15/2004 11:30:44 PM
From: Jeffrey S. Mitchell	Respond to of 122087

At some point, I had also thought about pursuing a semi pro-bono career in my real life to bring some real advocacy to the shareholder area... Does anyone seriously think that class action attorneys really care about shareholders? This is a direct result of the history of class action. Now that we've discussed the pitfalls of message boards, let's discuss the virtues... such as the ability to do group-think among knowledgeable investors who frequent this thread and others like it. Let's start by agreeing that the class-action approach to rectifying wrongs against shareholders is broken. How do we fix it? ----- For those who do no think the class-action approach is terribly flawed... I recall a segment on 60 Minutes where attorneys would sue large corporations in some small southern town where there was a long history of obtaining humongous favorable verdicts. While looking for it on the net, I then found an article entitled "The Class Action Con Game" by Lawrence W. Schonbrun. Here is an excerpt: In 1994, in Los Angeles, California, after learning about a lawsuit by Compaq Computer against Packard Bell Corporation, class action lawyers sued Packard Bell for selling computers containing recycled and reconditioned parts in new computers. The suit claimed that the practice reduced the value of computers sold to the general public. The case was settled; the company agreed to place language in its instruction manual for a three-year period with words to the effect that the computer "may contain used or reconditioned parts." In seeking approval of the settlement, both sides agreed that recycled parts have lower failure rates and thus are, in fact, better than new parts. The lawyers received $3.95 million in attorneys’ fees for a settlement negotiated within two months after filing the complaint. In 1986, class action lawyers sued several major banks in San Francisco, California, for conspiring to fix credit card interest rates at 18 percent. The evidence of the conspiracy (in addition to purported statistical probability) came from a Southern California college professor who claimed that an employee of one of the banks, since deceased, told him of a meeting he had attended twenty years earlier. Reportedly, bank representatives discussed interest rates. (The professor’s motives, it was found, were suspect; he had sued one of the banks unsuccessfully for allegedly stealing his idea for a debit card.) Three banks settled for $55 million (plaintiffs had alleged nearly $2 billion in damages), of which $7 million went to attorneys’ fees. The professor himself opposed the settlement as inadequate. A fourth bank refused to settle and a jury, after ten weeks of testimony, found in the bank’s favor. One juror stated that the plaintiffs "had no case." The judge, commenting on the plaintiffs’ expert witness, said "I would never let this man testify at a criminal trial . . . and anyone who did would be worthy of discipline." cato.org - Jeff