Fortune magazine has a short, often funny, and very effective interview with former SEC commissioner Joseph Grundfest. Among other things, Grundfest has a two-word explanation for the recent spate of corporate scandals: Winona Ryder. (Thanks to the Securities Law Beacon for the link.)
Quote of note:
Interviewer: "You've argued historically the class-action system has compensated investors - but hasn't deterred future misbehavior. Why?"
Grundfest: "I'm not suggesting that it has no deterrent effect. It's just weak compared with the criminal and the SEC enforcement mechanisms. The reason is that only 0.5% of the settlements in the 15 largest settlements came out of the pockets of the wrongdoer."Posted by Lyle Roberts at August 1, 2003 3:30 PM | TrackBack