Over the years, decades rather, numerous securities frauds have been discovered and taken to court. Most of them have been publicized in one way or another, but some have always stood out a little bit more amongst the masses of class action lawsuits. Really, this usually has to do with how many people were made victim to the frauds, the amount of money that was lost and then paid back from the company, and the amount of time that those frauds and false events had been going on for. Let’s take a quick look at some of them, you’ll be shocked by how much some of these guys ended up having to pay.
You could have been 5 years old and remember this lawsuit. Those investors that filed the lawsuits against Enron actually went about it from both a federal and state level. They were specifically after Enron’s accountant Arthur Anderson and the company’s former law firm, Vinson & Elkins. Basically, Enron had concealed a lot of important information from their investors. When great losses occurred, they were immediately attributed to that concealment. The investors had lost millions, and the company was at that point falling apart. In the end, Enron reached a settlement with the investors of $7.2 billion. This is still the largest payout to date in a class action suit associated with securities fraud.
The Dukes vs Wal-Mart Stores
In 1998 a female employee of Wal-Mart decided to sue the company claiming sexual discrimination under the Civil Rights Act of 1964. She claimed that after many years with the company, and in those years providing excellent service, she was denied a promotion because of her sex. It had started out originally as just a lawsuit between her and the company, but it was quickly upgraded to a class action lawsuit, having every female employee represented. Wal-Mart had to pay $11 billion at the end of the lawsuit. Since then, they have taken very seriously how they treat their employees and how information is disclosed to them.
Master Tobacco Settlement
This was a huge, huge class action lawsuit; each state had been represented by that state’s Attorney General, and each state filed a lawsuit against each top six tobacco companies in their state court (this was settled in 1998, so the top companies were rather different back then). Brown & Williamson, Lorillard, Philip Morris, R.J. Reynolds, Commonwealth, and Ligget & Myers were all involved in this lawsuit. The lawsuits were filed under anti-trust laws that called for the recovery of smoking-related health care costs. Many people claimed that companies did not inform the public correctly of what health issues could arise if they smoked. At the end of this class action suit, the companies collectively paid $206 billion; this was over 25 years though, but think, it was settled in 1998… they just finished paying that 5 years ago.
These companies all had massive lawsuits slapped on them, and from the looks of it they have all either learned from their mistakes, or at the very least, paid for them.
If you ever happen to be involved in a securities fraud you should consider getting legal from from a reputed Securities fraud attorney to ensure you get proper legal assistance.