Law Commons^™

How Shareholder Litigations Deter Directors And Officers. U.S. And Italy, A Comparative Analysis, Federico Pastre

Federico Pastre

This paper focuses on the issue of whether shareholder litigations brought in the U.S. - namely, derivative suits and securities class actions – and their equivalent in the Italian law system, achieve their principal regulatory goal of deterring corporate directors and officers from engaging in unlawful conduct, in addition to compensating shareholders and investors for the harm they suffered.

In the U.S., effective derivative suits and securities class actions, contingency fees, and the rule concerning legal expenses, create an entrepreneurial system in which directors and officers are ultimately deterred by the private enforcement of the law. Nevertheless, the presence of …

Making Plaintiffs Whole: A Tax Problem Of Interest, William E. Foster

William E Foster

This article illustrates the dramatic tax impact of interest awards in otherwise non-taxable litigation recoveries. While plaintiffs who recover personal injury awards typically receive favorable treatment, those receiving interest on such awards are taxed on the interest and are unable to utilize deductions for attorney’s fees paid to obtain the recovery. Further, the attorney’s portion of the recovery often will be included in the plaintiff’s gross income. The result is that the plaintiff recovers less of the interest than the Treasury or her attorney, preventing the plaintiff from being made whole. After reviewing the historical and theoretical framework that produces …

Secondary Liability For Securities Fraud: Gatekeepers In State Court, Jennifer J. Johnson

Jennifer J Johnson

This paper discusses gatekeeper liability under state securities laws for professionals and other secondary participants in securities transactions. The recent economic meltdown exposed numerous Ponzi schemes from Madoff to Medical Capital that were no longer able to masquerade as profitable enterprises. When promoters of fraudulent ventures are unable to provide restitution to their victims, plaintiffs seek out other sources of repayment including professionals and other secondary participants in the transactions that precipitated their losses. Although most scholars agree that professionals can perform an important role in deterring securities fraud, scholarly opinions vary widely on the appropriate liability regime, if any, …