| Title: | Market Investing |
| Moderator: | 2155::michaud |
| Created: | Thu Jan 23 1992 |
| Last Modified: | Thu Jun 05 1997 |
| Last Successful Update: | Fri Jun 06 1997 |
| Number of topics: | 1060 |
| Total number of notes: | 10477 |
Last week, we got a notification about a class action suit against the directors (and the company) of Cytogen. We had held CYTO last year and sold for a modest loss, but the stock tanked a lot after their drug for colorectal cancer did not meet FDA standards. The suit charges that the directors misled the public on the progress of the drug. What are our liabilities in case the suit loses? Is it worth participating in it?
| T.R | Title | User | Personal Name | Date | Lines |
|---|---|---|---|---|---|
| 651.1 | Lawyer Heaven | I18N::GLANTZ | Mon Jan 03 1994 21:16 | 14 | |
As I understand class action suits, your participation costs you
nothing; but you automatically waive any right to initiate litigation
yourself.
Furthermore, as a class action participant, you have little to say about
legal strategy, legal fees, etc.
Hence, going the class action route is preferred when your own case is
not strong or when the costs of bringing suit by yourself outweigh the
possible gain.
But if you have an especially good case; e.g., airplane accident,
initiating action yourself is preferred.
| |||||
| 651.2 | The way it's usually done.... | SPECXN::KANNAN | Tue Jan 04 1994 11:32 | 11 | |
More class action suits by shareholders are settled quietly out of court which usually means the litigants end up with some money. Managements do this to avoid being "dethroned" by the board. The market doesn't like to bet on companies winning lawsuits. They would rather take their money elsewhere. It's usually not in the interest of the company to fight class action suits by shareholders. Nari | |||||