When you purchase securities, you rely on the company information that is available from public sources like the financial press and the company’s financial statements. If the information is not timely, accurate, and complete, and investors lose money, the directors and officers of the company may be liable.
Investor claims against officers and directors can be challenging, but Silver Law Group has extensive experience with this type of litigation. If you lost money because of a company’s false or misleading public statements, contact our team to represent you.
Publicly traded companies usually have a Board of Directors that sets policy for the company. Directors have an obligation to act in the interest of the corporation and its shareholders. Officers are executives of the company whose powers are established by the directors, and they must implement the policies the directors set. Officers and directors are subject to the anti-fraud and disclosure regulations of the federal securities laws.
Companies that trade on the public exchanges must make financial disclosures to the public periodically. The Securities and Exchange Act of 1933 requires a company’s officers and directors to provide information when registering securities. The Securities and Exchange Act of 1934 governs corporations already trading on the exchanges.
The law requires companies currently trading on the exchanges to file Form 10-K annually. This form contains detailed financial information including an overview of company operations, risks the company faces, audited financial statements, and the company management’s analysis of performance. These companies must also file Form 10-Q every quarter. The reports also contain financial statements but are unaudited, in contrast to the 10K statements.
The law at 15 United States Code § 7241 requires the Chief Executive Officer and Chief Financial Officer of a corporation to sign the Forms 10-K and 10-Q. With their signature, they affirm that they have read the reports, the reports do not misstate any facts or omit any material information, and the contents of the reports fairly represent the company’s condition for the specified period. The officers must also affirm they have implemented internal controls to ensure the accuracy of the reported information and that they have checked the effectiveness of the internal controls within the last 90 days.
When any of these documents contains false or misleading information, or omits relevant information, shareholders who lost money because they relied on the company’s disclosures can sue. The directors and officers are liable to shareholders for decisions they make in those roles, including the decision to disclose or withhold financial information.
If you are wondering whether you might have a securities fraud case against an officer or director, the attorneys at Silver Law Group can review your situation and help you explore your legal options. For most shareholders, a class action lawsuit is the most efficient mechanism for holding the officers and directors accountable.
If you relied on the statements in a Form 10-K or Form 10-Q and lost money because it contained misstatements of fact or material omissions, you can sue the officers that certified the disclosures. However, an individual lawsuit isn’t a practical option for most individual investors.
The securities laws allow investors who lost money to band together to bring a lawsuit. One investor is the named plaintiff who oversees the litigation. Everyone else who held the stock during the class period—the time between when the incorrect information was disseminated and when it was corrected—shares in any settlement or verdict.
Silver Law Group frequently represents investors in securities fraud class action lawsuits, and our attorneys have an enviable record of success. We bring these actions against officers, directors, and any other party who promoted or disseminated false information.
The officers and directors of public companies have an obligation to disclose material information about the company’s performance and liabilities. Omissions and failures to disclose violate federal securities laws.
Talk to an attorney at Silver Law Group about investor claims against corporate officers and directors. This firm focuses on holding people accountable when investors lose money due to illegal and unethical conduct. We can represent you in an investor action, regardless of where you live in the U.S.