If you were induced to invest in a company and lost money because the financial statements you relied on were inaccurate, you’re probably not alone. False or misleading financial statements impact many individual and even institutional investors. If multiple people or institutions lost money because they relied on the same financial statements, banding together to recover the lost funds is often a possibility. These claims frequently involve the auditors or accountants who performed and reported the financial analysis.
Silver Law Group represents investors in financial statement fraud class actions. This type of securities fraud lawsuit allows multiple investors to participate in the action, but without the potential expenses or stress involved in pursuing an individual lawsuit.
Publicly traded corporations must periodically release financial statements prepared by independent auditors. Auditors and corporations must use Generally Accepted Accounting Principles (GAAP) when preparing financial statements. However, these principles are flexible and open to interpretation that leaves room for inaccuracies and outright fraud.
The compensation of top-tier executives is often tied to corporate performance, so management may be tempted to overstate profits and understate losses. Conversely, sometimes a corporation seeks to understate revenues and inflate liabilities:
Individual investors rarely have the expertise to analyze financial statements to the degree necessary to detect this kind of fraud. Even institutional investors can be scammed by a false or misleading financial statement prepared by a reputable auditing firm. In most cases, the best chance a stockholder has of recovering the money they lost from financial statement manipulation is through a class action lawsuit.
A class action lawsuit is a way for everyone who suffered harm for the same reasons to collectively seek redress from the wrongdoer. In a financial statement manipulation class action, eligible participants are those who invested in a company due to its false or misleading statements and lost their money. Silver Law Group proudly represents these investors and will not charge a fee unless we secure a payout for you.
The appropriate District Court will certify a class if the investors have substantially similar claims which impact the entire group are predominant over claims that apply only to individual investors. Members of the class are those who bought or sold the stock based on the information in the false financial statement. The relevant dates are called the class period, and a Silver Law Group attorney can advise whether your transactions fall within the class period.
When the District Court certifies a class, it typically names an investor to be the lead plaintiff who may present evidence of the unlawful behavior. If they achieve a payout, the verdict or settlement is usually shared between all the members of the class, as are the litigation costs.
Companies are responsible for the accuracy of the financial statements they disclose. When there is evidence of financial statement manipulation, stockholders can sue to recover their losses.
Civil liability generally attaches to anyone who had a part in publishing or publicizing the misleading information. They do not need to have intended to defraud shareholders to be civilly liable for losses resulting from the financial statement. Defendants in these actions could file suit against the company and its Board of Directors, the auditors, sometimes the law firm advising the company, and others who might have been involved in promoting the misleading information.
Financial statement manipulation can be hard to detect. It isn’t surprising that many investors lose money because of this type of securities fraud.
The trustworthy lawyers at Silver Law Group have substantial expertise in aggressively pursuing financial statement manipulation class action lawsuits. If you’ve been the victim of this kind of manipulation, get in touch with us immediately to discuss your legal options.
