Financial statement fraud occurs when a publicly-traded company deliberately manipulates its formal records to deceive investors and others about its true financial health. Financial statement fraud class actions are lawsuits filed by groups of investors who suffer losses because of a company’s fraudulent activities, such as inflating asset values, fabricating expenses, or hiding debts.
By working with an attorney and joining a class action claim, you can pool your resources with other individuals and businesses, increasing your strength against powerful defendants, especially large corporations. The South Florida attorneys at Silver Law Group have extensive experience in handling financial statement fraud class actions and representing a group of investors affected by the same fraudulent activity. We vigorously advocate for you in claims against brokerage firms, investment banks, auditors, and others involved in various forms of financial misconduct.
Financial statement fraud is committed when a company intentionally misstates or omits information in their financial reports to create a false impression of their financial performance or position. Some common examples of financial statement fraud include:
If a company engages in financial statement fraud, this can artificially inflate the stock price, leading investors to purchase shares at unrealistic values. When the fraud becomes apparent, the company’s stock price typically drops sharply, resulting in significant losses for investors who bought shares based on the deceptive financial information.
Financial statement fraud can also create a false sense of security and mislead investors about a company’s true financial standing, leading investors and creditors to provide funding or credit based on incorrect data. Exposure of financial statement fraud may mean the company is unable to meet its financial obligations, potentially leading to further losses for investors and instigating widespread litigation. If you are a victim of fraudulent financial reporting, contact a South Florida lawyer to discuss the potential for class action.
Financial statement fraud class actions are lawsuits where a group of investors collectively sues a company for damages caused by misleading records. A South Florida attorney from Silver Law Group can file such a class action after the truth about the company’s misrepresented financial status becomes clear, leading to a decline in the stock price. The class action structure allows you and other investors, who might not individually have the resources to sue, to join together and pursue your claims as a group.
The process begins with the discovery of financial statements that contain false or misleading information. An auditor identifies the specific timeframe, called the class period, during which investors purchased or sold the company’s securities. One or more investors, known as lead plaintiffs, file a class action lawsuit on behalf of all other investors who suffered losses during the class period. A judge then determines whether the case meets the requirements to proceed as a class action, including whether the investors are in similar situations.
If the judge certifies the class, those who invested within the class period receive notification of their inclusion in the class action. The parties may negotiate a settlement, which their legal teams present to the court for approval. If the parties do not reach a settlement, the case proceeds to trial, where the lead plaintiffs must prove the company’s fraud and the resulting damages to the class. If successful, the class members may receive compensation for their losses, often based on the difference between the inflated price they paid and the deflated price following the disclosure of the fraud.
Class actions provide a way for you to seek justice even if your individual claim is too small to pursue on its own. The Coral Gables attorneys at Silver Law Group can advise you on whether to participate in a class action lawsuit for financial statement fraud.
Our legal team frequently represents investors in cases where the Securities and Exchange Commission appoints a receiver to manage the affairs of a company accused of fraud. We also work with receivers to recover assets for investors and directly represent investors in pursuing claims against those involved in the fraud. We handle cases on a contingency fee basis—no fee is there is no recovery. Contact Silver Law Group today to request your free, confidential case evaluation.
