> When pharmaceutical company Depomed Inc. of the U.S. said this month it is fielding federal and state inquiries over its marketing of opioid painkillers, a stock drop was likely to follow.
> But it was less expected, legal experts say, that shareholders would then sue the company for securities-law violations, alleging that Depomed made false and misleading statements over a more than two-year period leading up to the Aug. 7 announcement in its earnings statement.
A lawsuit about making false statements is entirely different than a lawsuit saying a company is insufficiently profit-seeking. Unless the article broke down how many of those record lawsuits were actually over low earnings (which I can't tell), I don't think this shows anything.
I don’t believe it broke out the earnings cases, but they were significant enough to feature in the article (even in the subtitle, which you can see). No one claimed the opening example in the article was speaking directly to your point. I only did a simple google search about it because you offered no evidence to support your claim, and the results I got suggest to me that it is entirely possible to face shareholder suits if you retreat from a market rather than staying and continuing to make profits. I’m not interested enough in the topic to research it any further.
I think I disagree with you a little even regarding false statements suits, though: Just as a thought experiment: let’s say you lose millions in company X stock because they pull out of a market you think they should have stayed in. I would think going through the company’s public statements and claiming that you were mislead about their commitment to said market would be a decent angle from which to attack them. But that’s just thinking out loud, and I am no lawyer.
> When pharmaceutical company Depomed Inc. of the U.S. said this month it is fielding federal and state inquiries over its marketing of opioid painkillers, a stock drop was likely to follow.
> But it was less expected, legal experts say, that shareholders would then sue the company for securities-law violations, alleging that Depomed made false and misleading statements over a more than two-year period leading up to the Aug. 7 announcement in its earnings statement.
A lawsuit about making false statements is entirely different than a lawsuit saying a company is insufficiently profit-seeking. Unless the article broke down how many of those record lawsuits were actually over low earnings (which I can't tell), I don't think this shows anything.