Theranos investors cannot pursue class action: U.S. judge
reuters.com
reuters.com
How would it ever be possible to convict anyone on these grounds, period? Even if I had the fraudulent claims in my internet history I wouldn't be able to prove that they were specifically what misled me. This precedent sounds like a blanket license to lie to investors through any channels other than official communications.
The friend may have suggested investing it because of the false technology claim.
The vague insight percolating through the grapevine may have been initially triggered by the false technology claim.
So even if the individual investor did not know about the specific false technology claim, they were still harmed by the lie.
This sentence is so aggressively stupid, it makes me wonder about this judge's impartiality.
Other than minimum levels of wealth, it just establishes different reporting and structures for the investments (usually things like K-1s, non-traded vehicles, and little to no liquidity).
Madoff is a great example of this - he took advantage of his investors by lying to them about results. He went to prison for securities fraud (I'm summarizing here), and the investors pursued various lawsuits to get their money back.
In the Madoff case, JPMorgan was not only fined over a billion dollars [1], but also sued (and settled) for over 2 billion with defrauded shareholders [2]. This was basically for their knowing about the fraud and not informing shareholders (again, a legalistic simplification).
[1] https://dealbook.nytimes.com/2014/01/07/jpmorgan-settles-wit...
[2] https://www.cnbc.com/2014/01/06/jpmorgan-to-pay-26-billion-t...
Even though it is marked as an opinion (and should be free) I don't see an easy way to access N.D.Cal. opinions from their webpage without a pacer login unless it is whatever they deem a "Case of Interest".
I also downloaded it with the RECAP extension[1] so it should be available on CourtListener[2] soon.
Her father did work there after all...
tl;dr Especially at the Federal level, cases can take a very long time, but they do happen.
Not only that, but the more vocal of the two founders is now running for a senate seat.
If anything you seem to be supporting the unfortunate conclusion that there _is_ no real recompense. I tend to agree with the OP, even as an american, the structure of the law seems unequivocally built to support those with the power to navigate it. Bernie Madoff was the exception, not the rule, and by his own words, even this may not be the level of punishment one might wish (re: imprisonment) "They call me either Uncle Bernie or Mr. Madoff. I can't walk anywhere without someone shouting their greetings and encouragement, to keep my spirit up. It's really quite sweet, how concerned everyone is about my well being, including the staff […] It's much safer here than walking the streets of New York."[0]
[0]https://en.wikipedia.org/wiki/Bernard_Madoff#cite_note-134
Criminal charges are brought about by the Dept of Justice. The burden of proof for criminal cases is much higher so it takes more time to do the investigation and prepare the case. You also only get one shot at criminal charges - if you bring about a case that's too flimsy and the defendant is found not guilty in court they can't be tried again for the same crime no matter how much rock solid evidence is found later. As far as I am aware, the criminal investigation is still ongoing.
The SEC can report their findings to the DoJ to assist with criminal cases.
Either that, or one step closer to a clusterf--- of individual lawsuits. The fact that the class was not approved doesn't mean there are fewer lawsuits left — it probably means there will be more lawsuits, not fewer.
You own a proportion of the assets you are suing for. $100 worth of company assets you own becomes say $20, with $80 being returned to you as your class action win. But of course the lawyer fees come out so you get $30 of your $80 so $100 of assets just became $50. Your win is a huge loss.
Is this class action by investors against the company just the lawyers capturing the system to their profit? Can there ever be anything like justice at all with this?
Also: if the net worth of the company is less than its book value (possible), suing could increase your net worth.
I can't imagine many companies with a market cap less than disposal value of their assets. That's free money for any corporate raider it other acquirer. You do find money putting in the street but rarely and it doesn't stay there long.
These class actions are just an abject disaster for everyone. Except the lawyers, who make bank while enhancing their reputations in all the wrong ways. And it costs tax dollars to run the courts for them to vampire like so.
Insane. The money is gone, giving the remnants to lawyers won't bring any back. The correct remedy is jail for those who committed fraud acting as a deterrent j in the future.
Also, smaller investors can ride the coattails of larger lawsuits, if those are successful. Findings that Theranos fails to refute in those trials can be used against Theranos by subsequent parties, under the res judicata doctrine (specifically, collateral estoppel).
The 'reward' for cheating goes up as the proportion of cheaters goes down, and goes down as the proportion of cheaters goes up. There is an optimum somewhere in the middle.
It takes energy to detect cheaters and that amount of energy dictates how many there are.