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A Lawyer's Thoughts on a Layman's Analysis of a Securities Fraud Complaint

By Eric Lipman

Getting a non-attorney's perspective on lawsuits filed in the nation's courts is not a radical idea, is it? After all, in theory it's your average Joes and Janes who, many years and tens of thousands of dollars down the road, will be asked to decide which party is in the right, right? At the D&O Diary, Kevin LaCroix, himself an attorney who has clearly read his share of securities fraud complaints, took some time to reflect on the first blush reaction of a non-law blogger to this complaint (PDF) brought against pharma company Medivation. As LaCroix points out, the allegations will sound familiar to those of you who do this for a living: Management, in public statements, painted a rosy picture of the prospects for one of its drugs, all the while knowing the thing was in the crapper. When the cat was let out of the bag, in the form of disclosure that the drug didn't perform well in clinical trials, the company's stock plummeted 67 percent. Hence, lawsuit. The complaint was filed Tuesday. Yesterday, Gary Sattler at Blogging Stocks, presumably not a lawyer, called the lawsuit the "most questionable" putative class action complaint he has ever seen (without...

Full post as published by Legal Blog Watch on March 11, 2010 (boomark / email).