Squeezing out the corporate cash
Article Abstract:
Securities fraud cases rarely prevent wrongdoing since managers who act fraudulently rarely do so to benefit the company but rather to save their own jobs due to prior misjudgments. Activist judges have uniformly refused to let companies use the 'good-faith' defense in these cases and held these companies liable under the common-law theory of respondeat superior. Using this doctrine will always result in corporate liability, no matter what the corporation has done to prevent employee fraud. Attorneys who litigate these cases are the only ones who benefit.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1993
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Secondary liability revisited
Article Abstract:
Circuit courts have followed two trains of thought since the Supreme Court ruling in Central Bank of Denver v First Interstate Bank of Denver. Liability for aiding and abetting under Sec 10(b) of the 1934 Securities Exchange Act has become nearly impossible to establish, but a bill now in Congress could remedy that. The House Republicans' Common Sense Legal Reform Act does not address the problem, but S 240 in the Senate would expand liability to approximate its formerly understood scope.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1995
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Despite changes made by the Private Securities Litigation Reform Act two years ago, institutional investors have not yet taken the lead in securities suits
Article Abstract:
The US Congress hoped that institutional investors would take the leadership role in class action securities fraud litigation as a result of the 'lead plaintiff' provisions in the Private Securities Litigation Reform Act (PSLRA), but to date this has happened in only 10% of the cases filed under the act. The SEC has found that some institutions feared liability to other class members if they served as lead plaintiffs.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1998
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