The California Supreme Court Recognizes Holdings Claims for Securities Actions
- Topics:
- Securities litigation
- Tags:
- Business Operations,
- Stock,
- Security,
- Misrepresentation,
- Litigation,
- Investment,
- Finance,
- California Supreme Court,
- California,
- Thelen Reid & Priest
- Source:
- Thelen Reid & Priest
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Overview: On April 7, 2003, the California Supreme Court, held that California law authorizes a shareholder who is wrongfully induced to hold stock instead of selling it to bring a common law action for fraud or misrepresentation, if the shareholder can make a bona fide showing of actual reliance upon misrepresentations. In so doing, California joined a small group of states that have recognized common law claims brought by holders of stock alleging that they were fraudulently induced not to buy or sell stock, but to hold their stock. The majority concluded that California has a compelling interest in preserving a business climate free or fraud and deceptive practices and that private suits can assist in doing this. It is clear that the majority opinion, influenced by recent corporate scandals has opened the doors in California's state courts to holder actions.
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Format: HTML | Date: Jan 2003 | Pages: 1
