Can shareholders sue companies for poor performance?

[nicoleivy5]

Slater and Gordon law firm faces class action from shareholders
"Thousands of Slater and Gordon shareholders will take part in a class action against the high-profile law firm following allegations the company knew it was in financial trouble.

Rival firm Maurice Blackburn is leading the $250-million class action involving more than 3,000 people."

The company did "promise" to recover from its bad financial position, but if its not written in a contract do shareholders have a right to sue? Discuss

 

[SassyIrishLass]

Anyone can sue anyone....that doesn't mean they will win...and it produces far too many frivolous lawsuits.

 

[AyeCantSeeYou]

Yes, they can.

 

[Alex.]

Slater and Gordon law firm faces class action from shareholders
"Thousands of Slater and Gordon shareholders will take part in a class action against the high-profile law firm following allegations the company knew it was in financial trouble.

Rival firm Maurice Blackburn is leading the $250-million class action involving more than 3,000 people."

The company did "promise" to recover from its bad financial position, but if its not written in a contract do shareholders have a right to sue? Discuss

"Andrew Watson from Maurice Blackburn said Slater and Gordon distorted its budgetary prospects to the market after it obtained a division in the UK organization Quindells in April 2015.

The estimation of Slater and Gordon offers dove and they reported a net loss of $1.02 billion in August, however the firm guaranteed shareholders it would recuperate.

“It gave a bogus impression of how the organization was performing. It additionally had a thump on result on any income direction that Slater and Gordon gave,” Mr Watson said."

Yes it was fraudulent inducement to enter into a contract for the purchase of stock in this instance. Generally, an intentional act will be excluded from those who seek to recover under the firm Director's and Officer's ins policy, However, I am sure there will be a claim in negligent supervision, negligence in compiling the information for which people relied etc. On the negligence claim there should be funds from the D & O policy.

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