What is a securities class action?
A securities class action is a lawsuit brought on behalf of a group of investors who have suffered an economic loss in a particular stock or security as a result of fraudulent stock manipulation or other violations of federal or state securities law. In federal practice, such cases are brought by on or more investors in the stock, know as “Lead Plaintiffs,” on behalf of all other who have suffered financial losses as a result of purchasing shares in a company during the period of time the fraud or securities laws violations artificially inflated the value of the stock (known as the “class period”).
A securities class action is one case filed on behalf of hundreds or thousands of people. In the securities practice at HBSS most of our cases deal with investment fraud, ERISA violations regarding 401(k) and employee savings plans, fraudulent marketing and sales tactics of investment tools and more.
A securities class action is a class action filed by investors who purchased a company’s debt or equity offering within a specific period of time known as a class period and who have suffered economic injury because a significant negative public disclosure about the company during that class period caused a serious drop in the company’s stock price. Securities class actions generally are brought under the anti-fraud provision of the federal securities laws including Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 and the Securities Act of 1933.
Related Questions
- I am a member of the class of plaintiffs in the GM Securities Class Action Case. Where can I obtain more information concerning the status of that case and any settlement distributions?
- What is the difference between a securities class action and a shareholder derivative suit?
- How long does a securities class action take to be resolved?
