Corporate Governance

Using the US Legal System to Vindicate Shareholder Rights

By J. Robert Brown

When Enron collapsed, many on the continent viewed it as evidence of fundamental flaws in the Anglo-American model of corporate governance.  The collapse of Parmalat confirmed that common law jurisdictions had no monopoly on fraud and serious governance problems.

Parmalat also represented an opportunity to use the US court system to vindicate the rights of shareholders worldwide.  Outside of the US, derivative and class action law suits are difficult to bring.  A major import business, shareholders in international markets sometimes try to take advantage of the more open litigation model in the US.  Alas, in the case of Parmalat, shareholders (both in the US and overseas) didn't have much luck.  The remaining defendants were recently dismissed on Stoneridge grounds, as the post by Charlene Hunter below illustrates.   

Full post as published by The Race to the Bottom on October 01, 2008 (boomark / email).