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"I'll See You in Court!"

Investors don't just cut their losses and go home anymore-now they call their lawyers.

This story appears in the November 2001 issue of Entrepreneur. Subscribe »

There's an old saying that shareholders take their gains to the bank and their losses to court. That's certainly true these days, when a nosedive in price is enough to set shareholders off.

Even though Congress passed the Private Securities Litigation Reform Act in 1995, the number of federal securities class action filings increased from 191 in 1995 to 224 in 2000 and a projected 264 for 2001, with settlements averaging $12 million, according to National Economic Research Associates, a consulting and analysis firm in White Plains, New York. Filings rose from 11 to 19 per month between 1996 and 2000.

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