Financial statement fraud for publicly-traded companies happens more often than you might think. Even sophisticated investors can fall victim to it. If multiple investors lose money because they relied on a misleading financial statement, they can unite to hold the company, accounting firm, and auditors accountable.
The securities fraud attorneys at Silver Law Group represent investors in New York financial statement fraud class actions. We have earned a stellar reputation for getting justice for defrauded investors in class actions, and want to help you too – all on a contingency fee basis.
Publicly traded companies are required to file annual financial statements that an independent auditor reviews. They must also file unaudited statements on a quarterly basis. Institutional and other investors rely on these statements when making investment choices.
Investors sometimes wrongly assume that a company would not release an incorrect statement, risking its reputation and the possibility of facing regulatory compliance action. However, some incentives tempt companies and their managers toward financial statement fraud.
Since executive compensation is typically based on the company’s performance, the individuals in the highest echelon of the company’s management may disclose incorrect information to boost their personal wealth. Conversely, companies may intentionally understate their performance to fend off an acquisition or because they see an advantage in delaying the reporting of good numbers. If you lose money due to this sort of financial statement manipulation, our New York attorneys can bring class actions to recoup your lost investments.
A company is responsible for the inaccurate information it publishes in its financial statements. The company’s directors are fiduciaries and must ensure the accuracy of its financial statements. Even if the company corrects the error later, investors who made trades based on the false information and lost money may have a claim against the company’s officers and directors.
Independent auditors can also be liable for inaccurate financial statements. Legal liability is usually based on the independent auditor’s failure to detect the irregularities in the company’s financial statements. Sometimes, evidence is found that the auditing firm was an active participant in the scheme.
Depending on the facts of the case, others can also be liable for an investor’s losses. Sometimes the company’s outside law firm, and others who promoted investment using the false information, can be held liable. The attorneys at our New York office will investigate the circumstances surrounding the publication of the false financial statement and discuss the merits of a class action.
Investors who traded a stock between the first publication of the false information and the date it was corrected are eligible to file a class action lawsuit to recoup their losses. For most private investors, participating in a class action requires no active participation, and there are no upfront costs.
The court will appoint a lead plaintiff to direct the litigation and determine whether to accept a settlement offer. Participants in the class action can choose to opt out of the settlement and pursue a private lawsuit; however, the cost and uncertainty of an individual lawsuit make this option untenable for many smaller investors. Depending on the circumstances, our attorneys can discuss the merits and risks of pursuing an individual financial statement fraud claim with an investor.
The court must approve any settlement, including the legal fees and costs associated with it, after which the proceeds are distributed to the participating shareholders on a per-share basis. A securities fraud class action usually requires between one and three years to resolve.
New York financial statement fraud class actions are an efficient and effective way for private investors to recoup money they lost due to a company’s financial statement manipulation. While participation requires little effort on your part, class actions are a great way to hold wrongdoers accountable.
The lawyers at Silver Law Group have devoted their careers to advocating for cheated investors, achieving excellent results in the process. Contact us today if you have lost money because of financial statement fraud. We do this all on a contingency fee basis.
