Class Action Suit Madness

from the go-where-the-money-is dept

With all the dot com stocks stumbling, what’s the best way to make money these days? Perhaps it’s to get involved with all of the class action lawsuits against these companies. It seems that once a company’s stock tanks, everyone wants to file a class action lawsuit. While I think it makes sense in a few cases, in most it sounds like sour grapes from investors who simply didn’t do their research before investing.

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Comments on “Class Action Suit Madness”

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Ryan says:

People should think before they click

These days, joining a suit is a simple process: a few clicks and an e-mail to the firm.

It’s this mentality that caused the lawsuits to increase, the ability to do anything with a click or two. To file a suit 5 years ago, you would have to find a lawyer (hopefully a good one – more research), make an appointment, explain your position….it was a lot more work, so you had time to calm down and think things through, usually coming to a logical conclusion that a lawsuit was pointless. Recently, however, too many people fancied themselves day-traders and stock experts just because they have an E*Trade account, thinking that they could put their money anywhere and become the next dot com millionaire on the block. I had a friend do this in March or so – unfortunately, he got in right as everything dropped, but he thought anything would do great as long as it had .com in the business name. He looked at the stock page each morning – that was his research for his stocks. He bought stock right after the DoS attacks, thinking that because they were down after that, they had to go up. They plunged even further after he bought it. Same with numerous other stocks. Three months later, he closed his E*Trade account.

The people on Wall Street (and Bay Street in Canada) work full time for a reason – they have experience, and they can devote the time needed to finding out that info. Admittedly, you can do research as a day-trader, and Wall Streeters can screw up royally, and there are going to be some scams out there. However, people have to learn that you can’t pretend to be an overnight expert, then cry foul just because the stock didn’t do what you planned. People screw up, and if you want to throw money at them before looking at more than just their name, you deserve what you get.

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