Fraud at public companies can cause the loss of hundreds of billions of dollars in market capitalization. This amounts to an estimated loss of $40 billion annually to shareholders. But defrauded shareholders have a tool to recover their losses: securities fraud class actions.
Robbins Arroyo LLP attorneys successfully prosecute securities fraud class actions by recovering money for shareholder clients and helping enforce a standard of honesty, integrity, and fairness in the markets.
WHAT IS SECURITIES FRAUD?
Securities fraud is the intentional concealment, omission, or manipulation of financial information by a public company in violation of federal securities laws. Such actions cause investors to purchase or sell stocks and commodities based on false information. This misleading information can artificially inflate the price of the company’s securities above their true value. When the underlying truth is exposed, the prices of these securities plummet, resulting in losses for investors who relied upon the misrepresentations. In such instances, a securities fraud class action may be initiated by one or more investors who lost money as a result of purchasing the company’s securities at artificially inflated prices. The aim of the securities fraud class action is to recover money for all affected shareholders.
MISCONDUCT THAT MAY BE ADDRESSED BY SECURITIES FRAUD CLASS ACTIONS
Examples of illegal activities that involve the deception of investors or the manipulation of financial markets and that may be addressed by investors through securities fraud class actions:
- False and deceptive reporting of the company’s financial information to its shareholders by officers or directors, which artificially raises the value of the company’s stock and encourages investors to buy shares.
- Clinical trial results or other information about proposed products are overstated or undisclosed by company executives in order to drive up the stock price.
- Third party misrepresentation about the stock market or a particular company or industry, evidenced by the third party buying lots of cheap stock with the intent to sell shares once the stock price is manipulated to its optimum point.
DESPITE RULES DESIGNED TO DETER WRONGDOING, FRAUD PERSISTS
Federal securities laws were designed to promote openness within the securities markets, which depend on full disclosure of all material facts regarding public companies. Unfortunately, these laws do not always dissuade company executives and others from manipulating the market price of the company’s securities and misleading the public about the company’s financial condition or prospects for the future. And, despite the creation of government enforcement agencies to police companies and ensure compliance with federal securities laws, fraud persists.
OUR ATTORNEYS CAN HELP
If you have investment losses that you believe are the result of securities fraud or corporate misconduct, our attorneys may be able to help. Call us for a free evaluation of your potential case at (619) 525-3990 or toll-free at (800) 350-6003. Alternatively, you can send our attorneys a message through our Contact Us page.
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