No, I’m not a lawyer, and for other non-lawyers, thought I’d post some information (excerpt only - 25 page paper) before anyone here gets a wild notion about shareholder lawsuits. For Information purposes only:
WHAT’S WRONG WITH
SECURITIES CLASS ACTION LAWSUITS?
The Cost to Investors of
Today’s Private Securities Class Action System Far Outweighs Any Benefits
Professor Adam Pritchard: “No other nation has adopted the
open-ended private liability for misrepresentations affecting the secondary
market price of corporate securities that we have in the United States, and for
good reason. Our current regime is not the product of congressional action, but
rather, judicial happenstance.”4
This paper addresses (1) the irrationality and
ineffectiveness of these lawsuits as a mechanism for compensating investors;
(2) the fact that securities litigation continues to be driven and controlled
by plaintiffs’ lawyers, resulting in a parade of abuses mirroring the abuses
that led to criminal convictions in the 2000s; (3) the negligible deterrent
effect of private class actions; and (4) the multiple ways that injured
investors can vindicate their rights without the fraud on the market principle.
Irrational, Ineffective Mechanism for Compensation
Defenders of the class action system point to large
settlements as evidence that these cases effectively “compensate investors
injured by fraud.” But those numbers tell only a small part of the story. In
fact:
Settlements in securities class actions are paid not by
the parties responsible for fraud, but by other innocent investors (who bear
the cost of a settlement paid by the defendant company).
The transaction costs of the class action process are
high: billions of dollars each year are paid in attorneys’ fees.
The class action system destroys shareholder wealth by
harming the company sued. 3
The small, individual investors who have the greatest need
for compensation after a fraud are the investors least likely to be compensated
in a class action.
The private class action process does not produce
settlements based on identified wrongdoing; rather, it forces settlements in
virtually all cases that survive a motion to dismiss because of the
extraordinarily high costs of litigation and the bet-the-company size of a
potential adverse judgment.
www.instituteforlegalreform.com/uploads/sites/1/Securities_Class_Actions_Final1.pdf
Shareholders should interact directly with management if they have useful information.
We will work tirelessly to redact, rescind and return to the Company all shares inappropriately issued. Further, we will use all means at our disposal to seek redress from responsible parties and will cooperate with law enforcement agencies as needed.
http://www.otcmarkets.com/stock/MDMN/news/MEDINAH-Discovers-15c211-Discrepancies?id=139089&b=y
