Dumb quote of the day

Well, I'm going to make my snarky comment, since I have already suffered the consequences...

It seems likely that the true social costs of any particular violation are significantly less than the tens or hundreds of millions of dollars represented by potential class-based damages. Thus, the measure of damages under current law appears significantly higher than that needed to achieve optimal deterrence. This intuition is reinforced by the fact that actual settlements in securities class actions average only about nine percent of market losses. (Alexander, 1996, 1497).

Alexander is in general a pretty smart lady, but this is just dumb reasoning. Right before this quote, she finished telling us that the social costs included things like an undermined integrity of the market. What the hell makes her think that such costs are going to be reflected in settlement negotiations??? Particularly since the law does not include such costs as part of recoverable damages...