The Whittling Away of the Private Right of Action Under Rule 10B-5: The PSLRA, Janus, and he Financial Crisis
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Authors
Heine, Jamie
Issue Date
2014
Volume
48
Issue
1
Type
Journal Article
Language
Keywords
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Abstract
INTRODUCTION|In March 2009, Bernie Madoff pled guilty to a sixty-five billion dollar Ponzi scheme, the largest in United States history. In June 2012, R. Allen Stanford was convicted of a seven billion dollar Ponzi scheme. In the second half of 2007, securities litigation spiked due to the financial crisis. Of the 100 securities class action filings in the latter half of 2007, nearly a quarter related to subprime mortgages. A similar trend continued into the first half of 2008. While the recent financial crisis highlights fraud in mortgages, lending, and complex financial products, examples of other types of securities fraud abound. In 2006, Nortel Networks settled for 2.4 billion dollars for securities fraud claims brought by former shareholders alleging that Nortel falsified accounting entries after the Internet bubble burst. Shareholders settled similar claims with AOL Time Warner for 2.5 billion dollars in 2005. Also in 2005, World Com shareholders settled for 6.2 billion dollars for claims that the company improperly classified expenses and inflated its revenue. No one can forget the Enron scandal, where Enron concealed losses by its special purpose entities and which the company settled for 7.2 billion dollars...
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Citation
Publisher
Creighton University School of Law