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Big investors' suits stay put; Class-action law won't deter 'opt-out' cases.(Focus: Public Companies)
Crain's Chicago Business, May, 2005 by Klein, Sarah A
Byline: SARAH A. KLEIN The sweeping class-action law passed by Congress in February aims to rein in massive consumer fraud and mass tort cases by corralling them into federal court, where the bar for filing lawsuits is higher. But the new law doesn't shield public companies from all shareholder suits in state courts.
Because the legislation excludes securities cases, large institutional investors can continue pursuing shareholder claims in state court, where the rules of discovery and requirements for proving fraud are often more lenient. Institutional investors such as state pension funds are actively pursuing such lawsuits as a means of getting around a 1998 law that moved most class-actions based on securities law into federal court. The lawsuits are...
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