Going to be rather tough to find a lead plantiff when they learn that they could face jail time...
additionally, forward looking disclaimers cover the alleged issue rather well so it will become obvious that this is a weak fabrication aimed at attempts to reward shorts
Class-Action Lawsuits are an integral part of a short attack on a victim company. The most notorious of the class-action firms was Milberg, Weiss and their off-shoot law firms, which included Lerach, Geller and Coughlin. Milberg Weiss was forced to disband by the Justice Department; Lerach was just sentenced to prison time.
During the first half of this decade, about a dozen public companies were under attack by a short cabal that allegedly involved David Rocker and others. The victim companies included Krispy Kreme, Capital One Financial, Pre-Paid Legal, Netflix, Novastar Financial and others. The tactics described in this paper were almost universally applied to these companies. 75% of them were subject to an SEC investigation and about 80% were subject to a class action lawsuit filed by Milberg Weiss or associated firms.
The class-action litigation was closely tied to the SEC investigations. Given that SEC preliminary investigations are supposed to be confidential, the timing of the investigations and the litigation is remarkable. The litigation filing was invariably accompanied with much media coverage. This contributed to the onslaught of negative media coverage that accompanied the heavy volume down laddering of the stock price, making the manipulation look like a sell-off.
Milberg used paid professional plaintiffs as the lead plaintiff in their class action suits. They also used contingent fee expert witnesses. Both of these practices are illegal and have been successfully prosecuted by the Justice Department. Recently, Milberg, individually entered into a plea-bargain agreement that resulted in incarceration.5
