The interrelationship of securities class action litigation and pension plan tax policy: what's really at stake?
Article Abstract:
Critics of securities class action suits consider them a meritless source of revenue for wealthy investors while failing to realize the gains for pension plans and, through deferred taxes, the federal government. Pension plans equal approximately 25% of the capital markets' equity and they receive significant gains through class action remedies which benefits the individual employees. The government also loses if the pension plan is unable to recover its assets that were lost through misconduct because of deferred taxes. Therefore, these suits are a significant enforcement mechanism.
Publication Name: Securities Regulation Law Journal
Subject: Law
ISSN: 0097-9554
Year: 1993
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Damages in churning cases
Article Abstract:
A churning claim may be filed in federal court under Rule 10b-5 or in state court under fiduciary duty. Churning exists when brokers make numerous trades for accounts under their control mainly for the purpose of generating commissions. Three kinds of remedies are commonly made. They include disgorgement of the commissions charged by the broker, punitive damages, and compensation for portfolio loss caused by the churning. Portfolio damages should be limited to cases with evidence of a connection between the churning and the portfolio's quality.
Publication Name: Securities Regulation Law Journal
Subject: Law
ISSN: 0097-9554
Year: 1992
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Overcoming defenses to churning claims under the federal securities laws
Article Abstract:
Churning, or excessive trading, can result in actions by clients to recover fees or interest. The elements of proving a churning case are broker control and evidence of excessive trading. Proof of excessive trading requires evidence of high turnover and commission ratios. Proving broker control is more difficult for sophisticated clients, but novice investors usually grant greater discretion to their brokers. Churning remedies have included recissory, out of pocket and loss of bargain decisions.
Publication Name: Securities Regulation Law Journal
Subject: Law
ISSN: 0097-9554
Year: 1993
User Contributions:
Comment about this article or add new information about this topic:
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