Securities Fraud Claims of Misstating Profits

Securities fraud claims of misstating profits require you to prove that a company made a false financial statement that was material, you relied on it, and it caused you economic harm. If companies misstate their profits, injured investors frequently face significant financial losses, which can include both out-of-pocket expenses and diminished returns. This type of fraud also erodes investor trust and market stability.

Silver Law Group is a nationally recognized law firm that represents investors who have suffered losses due to securities and investment fraud. The securities fraud attorneys at our firm assist injured investors nationwide in filing class action lawsuits to seek compensation for their damages. We represent a diverse range of clients, from individual investors to large institutional investors, in various types of claims against major financial institutions, Wall Street firms, and third parties that contributed to your losses.

What Are The Elements Of Securities Fraud Claims Of Misstating Profits?

Misrepresenting investment profits is a type of fraud that occurs if a company or individual deliberately makes false or misleading statements about a company’s financial performance to deceive investors. To successfully bring a claim for misstating profits, the plaintiff (the injured investors) must generally prove several key elements:

• Material misrepresentation or omission: The defendant must have made a false or misleading statement regarding the company’s profits or omitted a material fact necessary to make the statements not misleading. A fact is material if there is a substantial likelihood that a reasonable investor would have considered it important in making an investment decision.
• Scienter: This refers to the defendant’s state of mind, showing an intent to deceive, manipulate, or defraud. It can be established by proving the defendant knew their statements were false or acted with reckless disregard for the truth
• Connection to purchase or sale of securities: The plaintiff must show that the misrepresentation or omission occurred in connection with the purchase or sale of securities.
• Reliance: The plaintiff must have relied on the false or misleading statement when making their investment decision. In cases involving publicly-traded securities, plaintiffs can often use fraud-on-the-market theory which assumes that stock price reflects the public misrepresentations.
• Economic loss: The plaintiff must have suffered an actual financial loss, such as the decline in the investment’s value, after the fraud was revealed.
• Loss causation: The plaintiff must prove that the profit misstatement was the direct cause of their loss, not an unrelated outside source. This establishes a causal connection between the fraudulent statement and the plaintiff’s loss.

Silver Law Group includes experienced securities lawyers, forensic accountants, and investigators led by our managing partner, Scott Silver, a former Wall Street defense attorney and a respected authority on investor rights. We handle cases on a contingency fee basis, so you won’t owe us a fee unless we achieve a successful result for your case.

How Does Liability And Compensation Work In Securities Fraud Claims Of Misstating Profits?

In a class action case involving fraud and the misrepresentation of profits, the company can face liability for false or misleading statements that artificially inflated its stock price resulting in investor losses. Executives and directors who knowingly approve or participate in misstating profits, as well as external parties such as financial firms, underwriters, and accounting firms, can also face liability for securities fraud.

Class action lawsuits allow a group of investors to sue a company, with one or more investors acting as lead plaintiffs on behalf of the entire class. If the parties reach a settlement or the court awards a judgment, the administrator distributes the total amount among eligible investors who file a claim.

The final amount each person receives depends on the total settlement amount, the number of plaintiffs, and their respective damages. To be eligible for compensation, you must have purchased the securities during the class period, which is the time the fraudulent activity occurred, and have suffered calculable financial losses.

Contact Our Attorneys For Help With Your Securities Fraud Claims Of Misstating Profits

Our firm regularly represents injured investors misled through false or misleading financial statements. This includes securities fraud claims of misstating a company’s profits. Silver Law Group primarily takes cases on a contingency fee basis, meaning you do not pay attorney’s fees up front, and you only compensate us if we successfully recover funds for you.

We also offer a free, confidential consultation to discuss your potential legal options. Contact us today to request a review of your case.