FAQs: Securities Fraud Class Actions

What is a securities fraud class action?

A securities fraud class action is a lawsuit filed by investors who bought or sold a company’s securities within a specific period of time (known as a “class period”) and suffered economic injury as a result of violations of the securities laws.  In cases involving misleading statements or omissions, a class period generally starts when a company makes an untrue statement of material fact about the company or fails to disclose a material fact necessary to render other statements not misleading.  The class period generally ends when the truth is fully disclosed to the investing public. 

What is the difference between a shareholder derivative action and a securities fraud class action?

In a shareholder derivative action, the representative shareholder plaintiff pursues claims on behalf of a corporation, and benefits indirectly as a shareholder from any corporate governance reforms or monetary recovery obtained for the corporation.  In a securities class action, the representative shareholder plaintiff pursues claims on behalf of themselves and a class or classes of similarly situated shareholders to obtain monetary and other benefits directly for the members of the class. 

What is the role of the lead plaintiff in a securities fraud class action?

A lead plaintiff is a shareholder or group of shareholders appointed by the court to represent the interests of a class or classes of similarly situated shareholders.  The lead plaintiff in a securities class action usually, but not always, has the largest financial interest in the relief sought by the class.  Lead plaintiff designation can be granted to individuals, groups of individuals, or entities, such as institutional investors and investment fund fiduciaries.  The lead plaintiff selects and retains counsel to represent the class. 

How do I become a lead plaintiff in a securities fraud class action?

Courts appoint as lead plaintiff class shareholders who request to be lead plaintiff within sixty days of the publication of a notice of the pendency of a class action and who demonstrate that they are the most capable of adequately representing the interests of class members. 

What are my responsibilities as a class representative in a securities fraud class action?

A class representative volunteers to represent other similarly situated shareholders of the corporation and agrees to act in the best interests of the class.  A class representative stays informed about significant developments in the case and works with class counsel to make important strategic decisions regarding the conduct and disposition of the litigation. 

If I sold my stock, may I still file a securities fraud class action?

Yes.  To bring a valid securities class fraud action claim, you must have purchased your stock during the class period and suffered losses as a result of the alleged fraud.  You are not required to have held your stock throughout the entire class period or to continue holding your shares today to file or obtain recovery in a securities fraud class action.   

Does it cost anything to participate in a securities fraud class action?

No. Plaintiffs in a securities fraud class action brought by Robbins Arroyo LLP are not responsible for paying attorneys’ fees or expenses.  All costs and expenses of the litigation are advanced by Robbins Arroyo LLP.  We only recover our fees and costs if we are successful in obtaining a monetary recovery or substantial non-monetary benefit for the class whose interests we represent.   If we prevail, our fees and expenses are paid out of the sums recovered for the class.    

How do I retain Robbins Arroyo LLP to represent me in a class action? 

Call Leonid Kandinov, Esq., at (800) 350-6003 or email inquiry@robbinsarroyo.com and our Client Relations staff will gather pertinent information and put you in touch with one of our partners to review your case.

 

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