Is it really true that once you sue, it is "easy" to
prove fraud? After all, you have to get around the
Business Judgment Rule that sets a rather high bar
(gross negligence or recklessness), and requires that
shareholders - who have the burden of proof - prove
(and not just allege) that the directors breached
their duty of good faith, loyalty, or due care in order
to rebut the presumption in favor of the directors.
However, once that presumption is rebutted, then
the burden shifts to the directors.
Also, when a suit alleges fraud, doesn't it have to
state particulars with some specificity, rather than
make mere general claims with the hope that discovery
(=a good fishing expedition) will then provide
substance to the general claims?
I don't, incidentally, disbelieve that PNMS and the
PDR exchange are a scam. (I got out, at a loss, a
while back.) I'm just wary of claims that any suit
against corporate directors is "easy." It definitely
isn't true that once a person sues a company, the
plaintiff wouldn't have to prove anything. Again,
the plaintiff has to prove breach of fiduciary duty
-- and the Business Judgment Rule allows directors
a LOT of lee-way to make bad, money-losing decisions
(because losing money is part of the risk of being
in business).
Regardless of the above, best wishes to anyone who sues.
[And if I'm dead wrong on any of the above, I'm
sure someone will let me know.]
AI
