Ed Korsinsky Answers Your Securities Litigation Questions

Securities Class Action

Securities class actions (SCA) or securities fraud class actions are lawsuits filed by investors who purchased or sold publicly traded securities of a company within a specified time-period (known as a “class period”) and suffered economic injuries because of securities laws violations.

What is Securities Fraud?

Securities fraud, broadly speaking, refers to the disclosure of false or misleading information or the concealment or fabrication of material information regarding a company. These misrepresentations can lead to an increase in stock prices. Investors who bought shares at an exorbitant price could be harmed when the truth about the company’s misrepresentations is revealed. These investors could be eligible for a claim for securities fraud.

Taking Action Against Securities Fraud

Investors can generally only recover a portion of their losses that are caused by fraud under federal securities law. Based on the facts and analysis by a damage’s expert, the determination of recoverable damage will differ. A pro-rata (i.e., proportional to total loss) share of a recovery is generally available to class members based upon their acknowledged loss as determined by a damage’s specialist.

A class is a group of people who purchased securities from a company during a specified time period, also known as the “Class Period.” You may be a member of a class if you bought securities during the Class Period and suffered losses. You don’t have to be a part of the class action to get money from the settlement.

Who Is Involved In The Lawsuit?

A class is a group of people who purchased securities from a company during a specified time, also known as the “Class Period.” You may be a member of a class if you bought securities during the Class Period and suffered losses. You do not have to be a part of the class action to receive compensation from the settlement.

Can I sell my stock and still participate in the class action?

You can still be a lead plaintiff if you sell securities after a securities class action has been filed.

You don’t usually need to keep your shares to become a class member. However, you must be able to show that your shares were purchased during the class period.

The Benefit of Securities Class Action Lawyers for Investors

Investors have greater leverage when they participate in class actions. Despite publicly traded companies having thousands to hundreds of thousands of investors with various amounts of losses, the class action allows all the investors to pursue compensation for their losses collectively, with the same attorneys. The company is now facing a greater potential judgment than if it were to defend itself against a few smaller claims by individual investors. This can force the company to negotiate and increase investor recovery.

Additionally, claims made by smaller investors are economically feasible through class actions. Investors with low losses may not be able to hire securities lawyers and file lawsuits against companies. However, investors can join investor class actions for virtually no cost. The class action lawyers, and their firm bear the costs of litigation, while the attorneys’ fees are covered by a portion from any settlement or judgment. Therefore, even if the class suffers relatively minor losses, they may be able to have their rights defended at virtually, or at no cost at all.