The Angels of Corporate Death - TheStreet

The Angels of Corporate Death

Nobody really likes health maintenance organizations. That's why they're the natural prey of these class-action predators.
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They are the modern-day Communist apparatchiks. They say they are working for the little people, but they plunder and take the gain mostly for themselves. Their sworn enemy is the capitalist system, and they can bring it to its knees, sector by sector, with a precision that is mind-boggling to Americans used to fairness, justice and the free enterprise system.

Who are these modern-day knockoffs of

Stalin

, and why can they get away with their insidious plans? They are the class-action mass tort bar. Fresh from their victory over the tobacco industry, they have now set their sights on the health maintenance organizations.

Oh, like tobacco, what a perfect victim. Nobody likes health maintenance organizations. They are poster boys of hatred. They will not ever get a jury that likes them or a judge that wants to rule in their favor. They are the consummate turnoff; in short, they are the natural, soon-to-be-crushed defendants of these angels of corporate death.

Amazingly, the stock market knows better than the analysts do. To a person, every analyst said yesterday that the declines in

United HealthCare

(UNH) - Get Report

,

Aetna

(AET)

and

Oxford

(OXHP)

were severe overreactions to a couple of negative articles.

Funny, these were the same types of analysts who told me not to worry about

Dow Corning

. Not to fear

A.H. Robbins

. Not to worry about

RJR

(RJR)

. Not to care about

Owens Corning

(OWC)

. Not to fret about

Eagle-Picher

. Not to freak out about

Philip Morris

(MO) - Get Report

. Not to worry about

American Home

(AHP)

.

But the owners of these stocks know better. They know these corporate leeches can't be stopped once they get started. They know the game. They have read

Joe Nocera's

excellent coverage of the silicon breast-implant debacle and how the lawyers are capable of grinding any corporation into dust, especially when the public doesn't like the targets.

How did this happen? Pretty simple. You take a group of millions of pissed-off people. You call them a class. You decide you are going to represent them. A court agrees. You now can sue on behalf of these millions for billions of dollars. The billions you get will be divided into small, paltry checks for each of the millions in the class and a gigantic, heart-stopping check for you. Maybe the power of the mass tort bar is so great that Aetna and UNH spare themselves the show-Moscow trials and just write checks to these guys to buy them off.

Heck, maybe the plaintiffs' lawyers themselves bought puts on the HMO stocks and then called the papers?

Hoo-hah, there's modern-day capitalism at work.

Whatever.

Until this system is reformed, if you work in an unpopular industry and have made many people dislike you, you are probably in their crosshairs right now.

Bang, bang, Your Honor. You're dead.

Random musings:

Didn't get a chance to buy

CIDCO

(CDCO)

off

Gene Marcial's

big push in his renegade column in

B-Week

last week? That's OK. It blew up last night. You can buy all you want now. And how about us suffering

Dial

(DL) - Get Report

shareholders? Where is our promised

Clorox

(CLX) - Get Report

bid that puffed the stock up and then left it lower than it should be because if the Marcial hype?

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Dial. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.