High Court May Take Major Securities Suit
Norris, Floyd, THE JOURNAL RECORD
When bad news strikes a company and the stock price plummets, no one suffers more than owners of call options to buy the stock.
Shareholders can hang on and hope for an eventual recovery; if they sell, they will end up losing only part of their investment. But options holders have no such luck. Their options are likely to expire worthless.
The shareholder has another edge. If he believes that the company put out false and misleading statements to prop up the price, the shareholder can turn to the courts for relief. But in the same circumstances, it is not clear whether an options holder can sue. Differing decisions have been reached by lower courts, and …
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Publication information: Article title: High Court May Take Major Securities Suit. Contributors: Norris, Floyd - Author. Newspaper title: THE JOURNAL RECORD. Publication date: November 23, 1988. Page number: Not available. © 2009 THE JOURNAL RECORD. Provided by ProQuest LLC. All Rights Reserved.
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