Liability for faulty earnings projections and optimistic statements

Article Abstract:

Differences between a corporation's projected earnings and actual earnings often result in class action suits and courts have been divided over whether to send the suits to trial or to dismiss them. Most cases dismissed were because intentional misleading statements could not be established. However, most of those sent to trial were supported by internal memorandums that discussed undisclosed crises within the corporations. Corporations should take care when making optimistic projections to include cautionary language and disclose potential problems.

Analysis, Disclosure (Securities law), Business forecasting

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The selection of institutional investors as lead plaintiffs under the Private Securities Litigation Reform Act

Article Abstract:

The authors examine the Private Securities Litigation Reform Act of 1995 and whether it has achieved congressional goals of encouraging large institutional investors to assume the lead plaintiff role in securities class action suits.

Evaluation

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Conflict and aggregation: appointing institutionl investors as sole lead plaintiffs under the PSLRA

Article Abstract:

An analysis of the Private Securities Litigation Reform Act of 1995's provisions for appointing lead plaintiffs and a framework for when institutional investors should be appointed is presented.

Interpretation and construction

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