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China Securities Class Actions. Ain't No Beef Nowhere.

By Dan Harris and Steve Dickinson

A couple of years back I got wind of a class action securities law suit being filed in the United States against a Chinese company (whose name I have completely forgotten) that had listed on NASDAQ. Curious, I called the plaintiff's firm and asked the lead lawyer how he intended to collect from the Chinese company should he prevail. His response (and I kid you not) was that he was going to "worry about that after winning." I have no idea if he won that case, but I can bet that unless that Chinese company had real assets outside China, this lawyer ended up collecting nothing. I thought of that case today after reading a very good three part series written by Professor Donald Clarke (he of the Chinese Law Prof Blog) on how it is difficult, maybe impossible, for shareholders to sue and collect against Chinese companies in China also. That three part series, entitled, Chinese Corporate Law, Where's The Beef? can be found here, here, and here.

Full post as published by China Law Blog on February 17, 2008 (boomark / email).