Any time a U.S. stock takes a big drop there is a good chance that some law firm will launch a shareholder lawsuit. From my days of picking individual stocks I’ve received my fair share of requests to join class-action suits and my share of invitations to share in the spoils of a successful suit. I’ve never bothered until recently.
I had the misfortune to have bought Tyco stock about a decade ago and lost quite a bit of money. A lawsuit alleged that Tyco “violated the federal securities laws by, among other things, fraudulently overstating its financial results, improperly using excess reserves to enhance and smooth those reported earnings, and failing to disclose to investors substantial amounts of senior executive compensation and a large number of related party transactions.”
Tyco admits nothing, but they did agree to pay $50 million to shareholders and I’m entitled to my slice. On the off chance that I’ll actually get a non-trivial settlement, I decided to fill out the paperwork to get my share. I had to supply sufficient proof of my trades and fortunately I’ve kept copies of every stock transaction I’ve ever made.
It will be interesting to see if I actually get any money. Being a Canadian and not having a Social Security Number could be a show-stopper. I’m sure there are other possible reasons why I won’t get paid that I can’t anticipate right now. But I wouldn’t have gone to the trouble if I thought there was no chance. Wish me luck.