Securities Class Action
Ed Korsinsky, Securities Class Action Attorney.
Your questions answered.
Securities Class Actions, or Securities Fraud Class actions, are lawsuits filed by shareholders who lost money investing stocks. The goal is to recover their losses.
What is Securities Fraud?
Securities fraud, broadly speaking, refers to the manipulation of stock prices by the dissemination of false or misleading information involving a company.
These misrepresentations can cause investors to pay artificially inflated prices for their shares. When the truth is eventually revealed, the stock price often declines and investors suffer losses, sometimes very large losses.
These investors could possibly recover their losses by participating in a securities fraud class action.
Taking Action Against Securities Fraud?
How much an investor can recover depends on how the loss calculation is presented to a court. Therefore it’s really important for investors to retain a knowledgeable attorney and damages expert.
A successful class action will result in an investor recovering their pro-rata share from a total recovery obtained on behalf of all class members.
But remember that how your losses are presented will determine how much you ultimately collect.
A class is a group of people who purchased stock during a specific time period, also known as a Class Period.
You may be a member of a class if you bought securities during the Class Period and suffered losses. You don’t necessarily have to be a part of the class action to get money from the settlement.
Can I sell my stock and still participate in the class action?
You can sell your shares and still be part of a securities action. In fact, in most circumstances, you can regularly transact in the shares and still participate in the class-action lawsuit.
You don’t typically need to keep your shares, however, to participate you must show proof that you transacted in the stock during the class period.
What is The Benefit of Hiring a Securities Class Action Lawyer?
Investors gain leverage by joining together. A class action allows all the investors to pursue compensation for their losses collectively, with the same attorneys substantially increasing the possibility of obtaining a greater recovery.
Rather than facing a few smaller claims by individual investors, the company must deal with a larger aggregated grouped claim, increasing the likelihood for a larger recovery.
Joining a class action entails no attorneys fees as all fees are paid upon a successful recovery at the end, typically by insurance proceeds obtained by the defending company.
Class-action lawyers typically advance the upfront costs of the class action at their risk, recovering only if the class action is successful.
Therefore, even if an investor’s losses are relatively small, it may still be worthwhile to participate because your rights are advanced with no upfront cost to you.
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