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California Proposition Raises Controversy; Would Obstruct Class Actions.(Originated from San Jose Mercury News, Calif.)
Knight Ridder/Tribune Business News, March, 1996 by Jordan, Hallye; Kaufman, Steve
Mar. 18--In 1988, three investors led a class-action suit against Ramtek Inc. for fraudulently selling $11 million in convertible securities based on fake sales records. Investors were left empty-handed when the company stopped interest payments and declared bankruptcy protection. The suit was settled for $2.5 million and a Securities and Exchange Commission investigation affirmed the fraud.
The case illustrates why Proposition 201 is so controversial. If the proposed law had been in place, some lawyers say, the suit would never have been filed.
Proposition 201, one of three anti-lawyer initiatives on the March 26 ballot, would cut the number of class-action lawsuits filed by stockholders in California courts by making it riskier and more expensive for...
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