The goal of the antitrust laws is to protect and promote competition for goods and services of all kinds. There are two main federal antitrust statutes. First, the Clayton Act prohibits mergers that are likely to substantially lessen competition. Second, the Sherman Act prohibits contracts, combinations and conspiracies that unreasonably restrain trade and also forbids monopolization by a dominant firm in a market. There are also laws in many states that are directed at promoting fair competition.
Some examples of conduct forbidden by the antitrust laws include price-fixing, market allocation, boycotts, tying arrangements, price discrimination, monopolization and attempted monopolization.
Private citizens and businesses, the U.S. Department of Justice and the Federal Trade Commission enforce the federal antitrust laws. Violations of the Sherman Act give rise to both civil damages and criminal punishment of up to 10 years imprisonment and $100 million in fines. Criminal penalties for violations of the Sherman Act, though, may only be sought by the U.S. Department of Justice. In states that have enacted antitrust laws, the executive branches of those states enforce them. In general, however, private citizens and businesses may also enforce state antitrust laws.
Antitrust actions may be brought as individual or class actions, depending on the facts of any given case and the desires of the injured plaintiffs. The decision to proceed on a class or individual basis, or to “opt out” of an existing action is one that involves balancing a number of factors, including economics, the probabilities of success, damages and relative bargaining power, among other factors. Scott + Scott works closely with its clients to ensure such decisions are made prudently, on an informed basis and in the client’s best interests.
With few exceptions, if a non-U.S. investor acquires the publicly traded securities of a U.S.-based corporation, or any securities on a U.S. exchange, they may participate in U.S. securities-fraud litigation concerning those securities, whether that is in the form of an individual action, as an active participant in a class action or as an absent class member.
No. All class members, regardless of citizenship, may submit claim forms in the same fashion as all other class members.
Derivative actions are lawsuits filed by shareholders on behalf of the corporation to enforce a cause of action against a third party, such as an officer or director of that corporation. Derivative actions are brought when a corporation possesses, but does not enforce, its rights against third parties, which may include insiders. It is often necessary for shareholders to institute a derivative action because the corporation, which is run by officers and directors, will not bring a lawsuit against one of its own, even where there is serious wrongdoing.
Derivative actions most often involve claims that officers and directors are wasting corporate assets or that a corporation’s management or board of directors breached fiduciary duties owed to shareholders by negligence, mismanagement or self-dealing.
Any relief granted pursuant to a derivative action is a judgment against a third person requiring them to pay money to or make changes for the benefit of the corporation. If money is recovered as a result of a derivative action, it is paid back to the corporation.
Yes. With very limited exception, all shareholders of every U.S. corporation have standing to pursue derivative litigation on that corporation’s behalf.
No. All expenses are advanced by Scott + Scott. Attorney’s fees are paid only if a benefit is obtained for the corporation and the court approves a fee.