The Mischievous Proposition 211
Blame it on California's Proposition 211. Intel Corp. just canceled an Oct. 31 meeting with analysts because it doesn't want to provide investors with "forward-looking statements" that could be used in securities class action suits. The worry is that if the California ballot initiative is passed, investors will have an easier time suing the company if Intel's stock drops unexpectedly and its projections on future earnings are construed as misleading statements. Worse, under Prop 211, Intel's board and company officers could be personally liable if the company's stock plummets because of what is determined to be misleading statements or actions. This is unacceptable. Prop 211 is a boon for class-action plaintiffs' lawyers and a threat to companies everywhere, especially those in high tech. Companies with shareholders in California could face securities suits in that state. Both President Clinton and Bob Dole oppose passage of Prop 211 on Nov. 5. So do we.
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