Securities Class Action System Is 'Broken': Study

Law360, New York (July 24, 2008, 12:00 AM EDT) -- The “broken” system of private securities class actions that has sapped the competitiveness of U.S. capital markets and rarely benefits shareholders should be fixed by Congress, a new analysis of the massive suits suggests.

The U.S. Chamber Institute for Legal Reform-sponsored study says that companies have shelled out nearly $52 billion in class action settlements over the past decade, and $17 billion of that sum has gone to plaintiffs lawyers and other middlemen.

Securities class actions are ballooning in quantity and size, with new lawsuits increasing...
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