More Litigation Is Not The Answer To Corporate Misconduct

Law360, New York ( February 19, 2015, 10:28 AM EST) -- Over the past 15 years, there has been a steady progression of corporate scandals, from Enron to options backdating to the excesses that led to the global financial crisis. These debacles were followed by waves of shareholder litigation. However, according to one legal scholar, the shareholder lawsuits all too often concentrate on enforcing legal duties on and imposing liabilities on the boards of directors of the involved companies, to the exclusion of the officers whose misconduct led to their companies' problems. As a result, the enforcement mechanism that shareholder litigation represents has not been effective in deterring corporate officer misconduct....

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