May 8, 2008
Plaintiff's Securities Lawsuits
Plaintiffs lawyers who have filed class action securities suits relating to the sub-prime loan crisis face Congressionally mandated higher pleading standards. The standards were a crude attempt by Congress to stop an acknowledge problem in the United States - an excess of securities class actions. But plaintiffs lawyers are also complaining about a recent Supreme Court case that establishes clearly what was or should have been the law for some time, that plaintiffs must prove causation -- the acts complained of caused damage. The press blames the Supreme Court for "higher" bars to recovery. In truth it is 1) a Congressional statute and 2) a long history of required causation that will test plaintiffs attorneys. I suspect that the press, gearing up for a political fight over court nominees, will slant its coverage of business litigation.
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