Why are securities class actions filed against companies?
Securities class actions are typically brought when: (a) a publicly held company and its officers, directors, other employees, accountants or underwriters publicly make any untrue statement of a material fact or omit to state material facts; and (b) as a result of ultimate disclosure of the untrue statement or omission, the company’s stock price drops, injuring investors who purchased the stock at artificially high prices during the class period.
