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| 2001 News and Press Releases |
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HEADLINE ARCHIVED:
U.S. Judges Get Tough On Class Action Suits
By: Per Jebsen
Reuters English News Service. September 5, 2001
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Excerpt: U.S. judges are taking some of the class out of securities class action lawsuits. That's good news for corporate executives and Wall Street firms who have paid out enormous sums in such cases - but aggrieved shareholders who've lost money may find the trend disturbing. In late August, the U.S. Court of Appeals for the Third Circuit, terming the size of the award "staggering," set aside $262 million in fees for class-action lawyers in the Cendant Corp. securities fraud litigation. The month before, the Fifth Circuit, in an unusual step, reversed certification of a class in litigation against Compaq Computer Corp. on grounds the district court failed properly to assess whether plaintiffs were adequately qualified. And, in a skewering that seems destined for the annals of legal put-downs, a New York district court judge in his mid-90s last month dismissed would-be class action complaints against Web analyst Mary Meeker and her employer, investment bank Morgan Stanley, for being, among other things, "in grossly bad taste." Each of these cases is legally distinct from the others. Together, however, they may herald greater judicial skepticism toward securities class actions - especially in interpreting the Private Securities Litigation Reform Act of 1995, a federal law designed to curb perceived abuses in such actions.
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