Open any major newspaper over the last few months and you will find a surprising number of articles detailing the significant drop in a public company's stock price in mere hours or days after the disclosure that the company has been civilly sued, be it a class action, securities fraud case, or harassment suit.
Falling Stock Prices?
Open any major newspaper over the last few months and you will find a surprising number of articles detailing the significant drop in a public company's stock price in mere hours or days after the disclosure that the company has been civilly sued, be it a class action, securities fraud case, or harassment suit. The decline in a company's stock price following the disclosure of a pending lawsuit is not by any means new. Yet, the speed and extent of the decline in a company's stock appears to have greatly accelerated in recent years. As a result, public companies are now faced with a growing number of lawsuits geared principally at obtaining a speedy settlement by leveraging the lawsuit's potential impact on a company's stock value.
By
Stephen R. Smith And Natalie CortezThis premium content is locked for LawJournalNewsletters subscribers only
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