Why the US-listed Chinese companies have been repeatedly class action

Why the US-listed Chinese companies have been repeatedly class action
Almost harsh in the United States securities regulatory system, the road of Chinese companies listed in the United States under a huge legal risk. CDC encountered for the first time a class action in 2001 after 10 years, Netease, China Life, UT Starcom, the CAO, Sina, Focus, Giants, etc. more than 20 listed companies in the United States suffered a class action "sniper".
Stock vulture eyeing
The flies do not stare seamless eggs. Chinese listed companies in the United States repeated large-scale collective action, in addition to their financial information to disclose problems, mainly the United States a group of specialized stock vulture - finding fault law firm.
Lovells International law firm partner Lu Tateyama lawyer believes that the slightest mistake abroad, a group of staring at every move listed companies, specialized lawyers filed a class action for a living (known as 'stock market vultures'), enterprise , it will lead to disaster "these" stock vulture ", the purpose of litigation is not for the maintenance of interests of investors, but with a utilitarian purpose.
"IT Times" survey found that the prosecution of a giant network and Focus Media CSGRR law firm, is an American lawyer peers as a stock vulture "firm. It is understood that the CSGRR is a company specializing in securities fraud, the company took over the litigation, insurance, antitrust, consumer fraud, environmental protection and public health, public interest litigation by institutions. Both in financial circles, or the legal profession in the United States, CSGRR are quite well known.
Headquartered in San Diego, California, United States CSGRR law firm was established not long, they are the famous American agency the largest class action lawyers, so many executives of listed companies "to talk about eagle mere mention of". Set up so far, CSGRR listed companies in the United States filed thousands of class action lawsuit, spearhead no shortage of Merrill Lynch, Citibank, Ericsson, Dell, Yahoo 500 strong company for shareholders to restore the interests of no less than $ 54 billion since 2004 . The firm's one with the case is to restore the loss of $ 7.2 billion to Enron fraud victims.
Why this law firm has repeatedly listed companies to court? With a keen interest in IT Times reporter to read the information on the law firm, found that the resume was surprised that a class action history of "rights": in February 2007, Dell was a class action; 2007 5 Yahoo advertising technology allegations of operating defects who were of the firm's class action; October 2007, Ericsson is alleged to publish the company's operations and financial condition of errors and misleading statements "was a class action ...
It is understood that in the U.S. top 100 law firms away, their expertise is to investigate listed companies in violation of the Securities Act, and then profit by the class action. Each company listed, they buy dozens of shares if they are a collection of 10 such shareholders can sue you. Buy 20 shares have to sue you for the qualification means that, as long as the stock market boom or crash, you can report your information is not properly disclosed, or find other crop. "According to informed sources, such as the U.S. law firm is usually peer held in contempt.
To be commissioned by the injured investors in accordance with the normal channels of the class action law firm to prosecute, but exactly the opposite in practice. The first law firm to identify the problems of listed companies, and then find investors, and then publish a notice to convene the victimized investors, then the network registration or telephone registration. Registered investors and listed companies to reach a compensation agreement, or in favor of each person can receive compensation.
As with CSGRR law firm, told the China Life Insurance filed a class action MilbergWeiss law firm, is a specialized eating the top players of the "collective action" rice. The most famous battle in the late 1990s, MilbergWeiss the 25 largest U.S. insurance companies paid an unimaginable $ 10 billion due to the misleading sales techniques. Now, several well-known companies including the Canadian Imperial Bank, Nokia, Nortel Networks and Shell oil it sued to court. The strength of those funds, with Payout ability of the company, especially the stock market vultures as prey.
Why are they this way? The reason is that the class action, attorney fees as high as in favor of 30% of the payment amount. Bluntly, they really are the biggest beneficiaries. "They may be under the premise of no cost to initiate a class action, and then get high returns." For this operation, the industry believes that is not the mainstream of American legal profession means, implying that some put on the table .
The eCapital CEO Ran Wang said, this means in the Wall Street lawyer industry is the norm. "Some law firms, its main business is to find the flaws of the prospectus, if the proceedings can get compensation, the law will be able to commission, and sometimes the defendant company took money directly to settle anyway, lawyers can always compete for their own to a lot of money interests. "