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Class Fraud Suits More Viable With Restatement, Lawyers Say – Bloomberg BNA
Judges are less likely to dismiss class securities cases where the company has restated its financials, statistic show. Jacob Zamansky of Zamansky LLC commented, “If the restatement shows that the company was falsely trying to dress up its balance sheet, those are cases where investors are likely to recover and courts are likely to come down hard on companies.” Companies often consider class lawsuits and/or enforcement proceedings simply a cost of doing business, however Jacob Zamansky does not agree with that approach: “There really should be some penalties by the SEC … [b]usinesses shouldn’t be restating financials in the first place.”