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Shareholder litigation is typically brought under federal securities laws. In this case IBM misled the market by failing to disclose material adverse informatio
by dean 13y ago
Shareholder litigation is typically brought under federal securities laws. In this case IBM misled the market by failing to disclose material adverse information which caused the stock price to fall. To prove you suffered losses you only have to show that you bought stock during the time period affected, and lost money as a result of the information coming to light.
This is interesting. Investors have a right to all material information about a company, and public companies are obligated to provide that information, and SEC regulations require that they do so. But, in this case, that information was classified, so IBM would be breaking the law by revealing it. Conflicting laws.
If the shareholders win, who knows, we may see more lawsuits like this. Maybe that would compel these companies to stand up to the government.
- waps 13y ago> Conflicting laws All modern law systems have methods to resolve conflicts between differing law interpretations. Every law falls somewhere on a priority list. At the top (in the US) is the constitution and it's amendments (with the amendments higher than the constitution). Then federal laws. Then federal executive orders. Then ... This is a very complex topic with dozens of exceptions and weird cases (for example court orders have higher precedence than federal laws, except if ...). But the end result is very simple : if 2 laws conflict one is more important than the other, and you get to ignore one of them. To further qualify this principle you have to build in perspective : it only matters what you see personally, not "the truth", only how the situation appeared to you.