Securities Class Actions

Securities class actions are brought on behalf of investors when publicly traded corporations commit fraud on the market, resulting in an artificially inflated stock price. When the conduct inflating the market price of the stock becomes known, whether it be because of fraud, insider trading, embezzlement or some other conduct, the stock price is corrected. As a result, investors lose money. Those investors can file a class action against the corporation, its officers and directors, and other potentially responsible parties, including accounting firms, for committing fraud on the market.

Both individuals and institutional investors may file securities class actions. However, once a securities class action is filed, the investor filing suit must provide notice to all investors of their right to intervene and move to be named the lead plaintiff. Thus, lead plaintiffs in securities class actions typically are institutional investors.

Register to receive your free copy of our legal guide.