What is a class period?
In a securities class action, the “class period” is typically the time frame during which it is believed the alleged fraud or other securities law violations artificially inflated the price of the stock at issue in the case. Only those persons who purchased stock during this period are included in the class action lawsuit. The class period is initially determined by plaintiffs’ counsel after extensive research and investigation. Sometimes the class period changes during the course of the litigation based on additional information uncovered during the discovery process.
A class period is a period of time during which plaintiffs claim that defendants defrauded and damaged investors who purchased the company’s securities. When companies commit securities fraud, the price of the security is artificially inflated by the fraud. Then, when the truth is later disclosed, whether partially or completely, the inflation in the security is let out, just like air is let out of a tire. In securities class actions, those persons who bought during the time a company defrauded the market and suffered an out-of-pocket loss (i.e., the price to which the security fell after the disclosure of the truth was less than the price for which the person paid for the security) are putative class members.
A class period is the period of time during which the corporate actors are alleged to have been engaged in wrongful conduct. The class period is specified in the complaint and the notice that is published following the filing of the initial complaint. A class period may be lengthened or shortened after the initial complaint is filed, depending upon the facts and circumstances of the case.
A class period is a range of dates within which a company is alleged to have been engaged in improper conduct. The attorneys investigating and prosecuting a case will review the facts of the case, and along with the court-appointed Lead Plaintiff, determine the appropriate beginning and end of a class period. Sometimes, after an initial complaint is filed, a class period will be lengthened or shortened as an investigation continues. If you purchased the securities of a company during a class period, you are automatically a class member, regardless of whether you specifically retain a law firm to prosecute claims on your behalf. This “class membership” concept is also true with respect to consumer fraud class actions and antitrust class actions. For example, if you purchased goods from a company that was accused of improper marketing practices during the relevant period of time (the class period), you would be a member of the class for a consumer fraud class action, even if you did not
