• Mar 22, 2010
Last Friday, Toyota's stock closed at $79.56. That represents a 12-percent drop in market capitalization. For those keeping track, that's a loss of $15 billion. Naturally, there are a number of none-too-pleased shareholders hanging on to their stock in the Japanese automaker.

As such, it comes as little surprise that law firm Murray, Frank & Sailer has filed a class-action lawsuit in U.S. District Court in California on behalf of any and all shareholders who purchased stock between Dec. 22, 2009 and Feb. 2, 2010. The suit contends that Toyota issued "materially false and misleading statements" and "failed to disclose ongoing safety issues and quality control problems with Toyota's automobiles," especially issues related to alleged cases of unintended acceleration.

Would shareholders that purchased stock in Toyota have done so if the automaker had taken a more pragmatic stance on the problems it was about to face? It would seem that's up for a judge to decide.

Peter Henning, a Wayne State University law professor cited by The Detroit News, points out that securities cases are notoriously difficult to prove. "You are going to have to prove knowledge among the corporate management. Unless something else emerges, it seems that Toyota didn't think that it would be the kind of problem that it turned out to be," said Henning.

A three-judge panel is set to meet on Thursday to consider this and all other impending class action suits against the beleaguered automaker. Until then, Toyota certainly has its hands full with potential headache-inducing litigation to consider.

[Source: The Detroit News | Image: Junko Kimura/Getty]


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  • 25 Comments
      • 4 Years Ago
      My first response to the headline was "Ouch..."
      • 4 Years Ago
      Eh?
      More like, when is it gonna end..
      • 4 Years Ago
      Americans are sue! crazy!
        • 4 Years Ago
        Yeah Oby we are sue crazy, its called a democracy, sure you aren't used to it or probably don't have the capacity to do so, sorry about your life.
      • 4 Years Ago
      Toyota isn't being sued by shareholders.

      Toyota is being sued by bottom feeding trial lawyers who claim to be acting in the shareholders' name.

      These lawsuits, when successful, pay shareholders literally pennies per share.

      And pay the trial lawyers that brought the suit millions.
      • 4 Years Ago
      "That represents a 12-percent drop in market capitalization"

      A position many automakers would envy right now.
        • 4 Years Ago
        What they don't tell you, is that Toyota's stock is about on par with the tracking of the Dow Industrials Average, up over 50% from early 2009 lows.
        • 4 Years Ago
        The fact of the matter is that the stock is doing quite well and doesn't seem to have been impacted by this at all, making this lawsuit all the more pointless. Not only is it pretty impossible to prove that they actually did anything wrong for their investors to begin with, but the fact that the shares are doing well make it pretty impossible to calculate an actual financial loss to sue for.
      • 4 Years Ago
      So wait a second... I don't really buy and sell stock much at all... but isn't there kind of an inherent RISK involved? I mean, overall?
        • 4 Years Ago
        +1. Play with stocks, and you're going to get burned from time to time. It's called GAMBLING, and whining about it is like suing the Lotto because your scratcher didn't win.

        The only way this suit will go anywhere is if someone dredges up material evidence that Toyota intentionally misled investors about intentionally dangerous, shoddy goods. That's going to be awfully difficult to prove. Conducting lawful product recalls hardly counts.

        I have a feeling a lot of lawyers will be sinking to new lows as they chase the Toyota ambulance.
      • 4 Years Ago
      I think Toyota has taken some hard lumps, but most could have been avoided. I feel sorry for the families that died in run-a-way Toyotas, especially those cases that don't sound like they fit the description of "driver error". I believe we have seen some attempts at deception and fraud, which was expected, but I don't believe that fraud and driver error explain them all.
      • 4 Years Ago
      Men lie women lie numbers don't
      • 4 Years Ago
      Once these lawyers are done with Toyota, NHTSA won't have anything else left to fine.
      • 4 Years Ago
      looks great on those dirtlumps.
      • 4 Years Ago
      well when you buy stock its mainly your own risk..
      but i can't say anything about this one... they need to learn.
      • 4 Years Ago
      Ouch.
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