Predicting The Future

The Associated Press has an article discussing whether the market should expect another set of corporate scandals in the future. Although human nature is unlikely to change, the article reviews the legal environment and concludes “[i]n sheer numbers, the legal activity of recent years – both government action and investor litigation – should be enough to give any would-be wrongdoer some immediate cause for pause.”

Quote of note: “‘I don’t think there’s a clear connection’ between legal risks and improper behavior, said Bruce Carton, executive director for Securities Class Action Services at ISS. ‘When the misdeeds are going on, people aren’t thinking years down the road, ‘Will this cost me in a class action suit?’ My sense is that (the legal risk) generally won’t deter the bad guys, but it may spur the bad guys’ employers to put safeguards in place that may catch or deter somebody down the line.'”

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