When a corporation, lawyer, or accountant provides misinformation that impacts the price of a stock, a class action securities fraud lawsuit often follows. These lawsuits allow small investors to seek compensation for losses they suffered due to the misleading statements or actions.
One lead plaintiff will manage the case, and other investors who joined do not have to do anything to share in the settlement or jury award. However, if you are a plaintiff in one of these lawsuits, it’s good to understand the securities class action claim process.
The securities fraud attorneys at Silver Law Group are skilled advocates for bilked investors who can explain how the case is progressing.
When an investor has been defrauded, they can file a lawsuit in federal court. Their legal petition for relief will state the facts on which they base their fraud claim, including the name of the stock and specifics about the misconduct they allege. Typically, multiple investors file lawsuits based on the same set of facts.
The first investor to file must publish a notice about their lawsuit within 20 days of filing. Others with claims based on the same facts have 60 days from the publication date to petition to be considered the lead plaintiff. 15 United States Code § 78u-4(B) says that the person or entity who has the biggest stake in the outcome of the case should be the lead plaintiff if they can adequately represent the claims of the other investors. A judge must hold a hearing to select a lead plaintiff within 90 days of the announcement publication date.
When the judge selects a lead plaintiff, that plaintiff oversees the litigation, including selecting the law firm that will pursue the case. Silver Law Group has served as counsel to the lead plaintiff in these types of cases, but can also represent smaller investors’ interests.
Defendants often bring a motion to dismiss the case early in the proceedings. If the case survives the motion to dismiss, the discovery phase begins. During discovery, both sides interview witnesses and seek information from the other to help them prove their case.
Discovery can take months or years, depending on the complexity of the case. Usually each side brings multiple motions, asking the court to make rulings on various issues. In many cases, information gleaned during discovery will open other lines of inquiry that must be pursued.
When there is adequate information to show that the plaintiffs suffered similar harm arising from the same misconduct, the court will certify the case as a class action. Typically, defendants try to settle a case when the court has certified it as a class action, although some end up going all the way to a court judgment.
Securities fraud class action cases often settle even when the defendants deny unlawful conduct. An open lawsuit with potentially significant liability can negatively impact a business, and defendants often calculate that a settlement is more advantageous than continuing to fight it. The parties might engage in mediation to try to settle the matter.
When the parties reach a settlement, all the plaintiffs must be notified of the dollar amount of the settlement, the requested attorneys’ fees, the reason for the settlement, and any other information the court requires. The notice must also include deadlines for the investor to object to the settlement or opt out.
If you aren’t sure whether to object or opt out, contact the Silver Law Group. We can review your situation and discuss the advantages and disadvantages of opting out in your particular case.
If you’re a small investor who was defrauded out of your investments due to omissions or manipulation, you may be wondering about litigation. The securities class action case process is complicated and can take a long time from initiation to resolution.
Silver Law Group can answer your questions and provide guidance on how you can get your money back. The case process may be long but can be worth it if you recoup your losses and hold these fraudsters accountable.
