This initiative statute would ban limits on attorneys fee arrangements, and would authorize shareholder derivative actions in California state courts that have been severely limited in federal courts by congressional action. Those measures, sponsored by Silicon Valley business interests, had sought to limit attorneys fees, along with shareholder derivative actions and securities class actions against corporations. Securities are stocks, bonds and other Wall Street assets held by investors.
Stocks represent shares of ownership in a corporation or partnership.
Bonds are another form of financial investment, similar to loans. Securities fraud occurs when a seller of securities knowingly or recklessly makes fraudulent statements or omits critical facts in describing the offer. Fraud can also be committed by accounting firms evaluating the offer, and by brokerages and brokers selling the securities. Lawsuits alleging securities fraud have resulted when corporate managers, in some cases at high-technology companies, have overstated the value of their products and the ability to bring them to market. These forward-looking statements can include estimates of future business trends, estimates of stock performance, and suggestions regarding how an individual company might grow.