Shareholder nuisance lawsuits can happen basically any time the stock goes down... or doesn't go up enough, and often companies will settle instead of the expensive fighting...
Shareholder nuisance lawsuits can happen basically any time the stock goes down... or doesn't go up enough, and often companies will settle instead of the expensive fighting...
There are grounds legally if shareholders can prove that the "long-term risk reduction" argument is a lie, they can sue under the Duty of Loyalty. In reality, yes, this amounts nuisance lawsuits, large settlements and disruption at the board level. In practice, this and the executive pay structures almost always incentivizes short-term decisions and these risks become problems “for the next person.”
This is Matt Levine's theory of "everything is securities fraud".
Something bad happens, stock goes down, angry shareholders sue because they should have been told the bad thing would happen and the stock would go down.
Shareholders? Hmmmm...
https://secform4.com/insider-trading/1018724.htm + https://i.imgur.com/tMBfGee.png = ?
Cue security entitlements, e.g. https://ndlegis.gov/assembly/69-2025/testimony/SJUD-2364-202...