SECURITIES CLASS ACTION LITIGATION
Types of Securities Class Action Cases
Though the details of each case vary, the majority securities class actions pursue similar legal claims. Here are a few of the most common:
Fraud or Deceit
These claims argue that a defendant engaged in fraud or deceit in connection to the purchase or sale of securities. The fraud or deceit can be active, as when a company lies about its earnings, or it can be through omission, such as when a company fails to report potential liabilities.
False Forward-Looking Statements
These claims involve projections about corporate actions and their performance. Such claims allege deliberate falsehoods in documentation such as earning estimates, future expenses, anticipated expansion, and forthcoming flow of monies.
Other Common Claims
Other claims may revolve around insider trading, poor governance, and deficient accounting. Insider trading claims dispute that traders acted on essential, non-public knowledge in securities trades. An insider trading claim can be made, for instance, when a corporate officer dumps their stock holdings before fraud reports are made public. Inadequate governance claims allege that the company lacked sufficient internal controls in order to safeguard against fraud or other harmful actions. Lastly, claims in regard to accounting blame a corporation of failing to obey accepted accounting procedures.
When a class action lawsuit begins, it is first necessary to determine who qualifies to be a member of the class. Usually, it will begin by determining the “class period.” This is the time during which the alleged infringement took place. For instance, if the class action accuses a corporation of fraudulently inflating its stock price over a five-month period, the class period would be the five months during which the alleged fraud took place. In order to inform potential stockholders of the suit, attorney’s may issue press releases to online and physical publications.
WE WORK FOR YOU
Barbuto & Johansson, P.A. represents institutional and individual investors in lawsuits against publicly traded companies for stock fraud. When a corporation issues materially false and misleading statements to its investors and the public, such statements often result in the artificial inflation of the stock price. Ultimately, when it is finally revealed that the statements were untruthful (sometimes several months later), the stock often plummets, falling back to where it should have been before the false statements were made. The firm sues such corporations that issue false statements, and seeks to recover investors’ losses, which are often significant.
If you believe you are a victim of securities fraud, or simply just have questions, please contact one of our experienced attorneys. Call the firm today at (561) 444-7980.