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Monday, July 7, 2014

US companies adopt bylaws that could quash some investor lawsuits, (NCM: BIOL), (NCM: ECTE)

A handful of mostly tiny U.S. companies have become the first to adopt controversial bylaws that would shift legal fees to investors who sue and lose, which legal experts said could upend the economics of shareholder litigation. The Delaware Supreme Court ruled in May that "loser pays," or fee-shifting, bylaws were valid and could be used to deter lawsuits.Six companies in recent weeks have adopted the bylaws, which govern relations between a company and its shareholders.At least two of the companies, small medical device makers Echo Therapeutics Inc and Biolase Inc, have been sued by shareholders this year over the make-up of their board."The Echo board determined that the adoption of a fee-shifting bylaw provision and its potential effect in deterring future frivolous litigation was in the best interests of all shareholders," the company said in a statement.

BIOLASE, Inc., formerly BIOLASE Technology, Inc. is a medical technology company that develops, manufactures and markets lasers, and markets and distributes dental imaging equipment and other related products designed for applications and procedures in dentistry and medicine. Shares of BIOL fell by 2.45% or $-0.05/share to $1.99. In the past year, the shares have traded as low as $1.15 and as high as $4.10. On average, 303313 shares of BIOL exchange hands on a given day and today's volume is recorded at 232227.

Echo Therapeutics, Inc. (Echo) is a transdermal medical device company. Shares of ECTE fell by 2.63% or $-0.06/share to $2.22. In the past year, the shares have traded as low as $1.53 and as high as $4.91. On average, 112981 shares of ECTE exchange hands on a given day and today's volume is recorded at 72531.



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