The directors and executive officers of THQ Inc (NASDAQ THQI) are facing a class action lawsuit from its shareholders as a New York law firm is looking for plaintiffs in its anticipated class action lawsuit based on their wrongdoing in connection with backdating of stock options.
The firm, Stull, Stull& Brody is one of many law firms whose business is to generate business by starting class action lawsuits on behalf of a defined class of plaintiff. The law firm involved must first identify a class of people who has been the subject to a wrong, obtain a sufficient number of plaintiffs, get the class action lawsuit certified and finally settle the dispute.
The shareholders are only suing the directors and officers as it would not make any sense to sue the issuer as any award taking from the issuer and given to the shareholders would be like taking money from the right-hand pocket and giving it to the left-hand pocket.
If successful each shareholder stand to gain a minor amount but the only party who will really benefit from this action is the law firms involved.