October 16, 2008

Pritchard's Proposal

Securities Docket has an interview with Professor Adam Pritchard (U. Mich. Law) on his proposal that corporations opt-out of the current securities class action system by limiting potential investor damages to the disgorgement of the defendants' gains. The post also includes links to Pritchard's expanded Cato Supreme Court Review article on the subject and his model shareholder proposal.

Quote of note: "My guess is that no company will buy on to it unless it gets past the SEC first, in response to a no-action letter attempting to exclude the proposal as inconsistent with federal law. Iíll concede that the chances of ultimate success are probably less than 50%, but I donít see a big downside from trying."

Posted by Lyle Roberts at October 16, 2008 5:53 PM | TrackBack
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