The class action lawsuits against TD bank may require a very large payout to settle, is it not better to wait until they settle and then buy the stock?. TD has pleaded guilty to all the charges and will have to payout for sure.
Thanks,
George
Nothing is certain in the legal world. These lawsuits are extremely common whenever a share price declines sharply. They are essentially trying to prove that 'management should have known'. From a legal standpoint, this is very hard to prove. The regulatory fine is different and regulatory agencies do not have the same burden of proof needed that a court does. So while TD has 'admitted' to the issue, it does not necessarily give the plantiffs more fire power. In 95% of these such cases, the lawsuit goes away. In the balance, a small, non-material payment is made, of which the lawyers take most. We have never seen a material judgement in such cases. Now, TD stock can still decline on sentiment. Trying to sell and re-buy can work, at times, but with TD at 9X earnings we think a lot of investor concern is already buried within the low valuation.