Shareholder class actions dispense an odd form of justice.
They take an incident which crashes a company’s share price — eg a downgraded profit forecast or a regulatory investigation/penalty — and then inflict more pain on those affected; the shareholders.
It matters not that a punter might have later sold at a profit — and be double-dipping. Just that the shares were bought at an inflated price.
The litigation funders backing these claims will tell you they are performing a community service; that the shareholders have no other avenue for justice and that boards have lifted their game as a result.
They cost upwards of $10 million even before trial, but are stupendously profitable with returns of up to 60% of settlements.
