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| 2001 News and Press Releases |
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HEADLINE ARCHIVED:
Lawsuits Pile Up Against Once-Bullish Companies Investors Look To Lay Blame For Falling Shares
By: Matt Krantz
USA TODAY. November 19, 2001
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Excerpt: Fallout from the excesses of the 1990s bull market has created an unwelcome kind of boom for Corporate America: class-action lawsuits by disgruntled shareholders. Amid the worst profit recession since World War II, investors and lawyers are on a historic witch hunt hoping to get revenge for a stock market crash that has erased $ 5 trillion in shareholder wealth. Complaints against companies are piling up. Allegations range from executives dumping stock ahead of bad news to companies using dirty accounting tricks to underwriters rigging initial public offerings. Some 368 companies have been named in securities class-action lawsuits filed in 2001 -- easily a record -- and the year is not over yet. It isn't just the rising number of lawsuits, but also the costs to settle them, which is what most companies faced with such lawsuits traditionally do. Companies that settled securities class-action lawsuits last year paid $15.4 million on average, PricewaterhouseCoopers says. That's up from the average $14.3 million per settlement in 1999 and $13.8 million before 1995. Although 2001 data won't be compiled until after Dec. 31, analysts say the average cost to settle this year will be even higher.
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