The The New York Times has a lengthy article in today’s edition on the securities class action against AOL Time Warner. The author concludes that a dismissal of the case appears unlikely.
Quote of note: “In what one legal scholar called ‘the judicial equivalent of a Freudian slip,’ Judge Shirley Wohl Kram of United States District Court in Manhattan responded to a preliminary letter from shareholders’ lawyers by ordering AOL Time Warner to turn over millions of pages of documents before the lawyers filed a formal motion or the company had a chance to respond. When AOL Time Warner’s lawyers complained, she quickly rescinded the order.”
Quote of note II: “[L]egal experts say that the settlement in this case may well exceed previous benchmarks and formulas because of the political impetus among judges and regulators these days to crack down on corporate fraud. ‘There has been a regime change,’ said Joseph A. Grundfest, a law professor at Stanford and a former member of the S.E.C., adding that ‘settlements are more difficult for companies to negotiate in the post- Enron environment.'”