Michael Orey over at BusinessWeek wrote a commentary about a problem with shareholder class action suits against their corporation, particularly concerning a case against Bank of America alleging failure to disclose bonuses set to be paid to Merrill Lynch employees. His concern centers on the fact that the former shareholders of BOA (they have since sold their securities after seeing its value drop due to the alleged misconduct) are seeking to recover directly from the corporation – in effect forcing existing shareholders to cover any resulting damages. The main problem is that the shareholders who did not sell their shares after the drop in value will now have to also bear the costs of paying to settle this lawsuit – even though the true wrongdoers are the officers of the corporation who allowed the alleged misconduct. Further, because the true wrongdoers are not being punished, the result of the lawsuit will not deter similar future conduct. The system seems to be clearly flawed and needs a change.