The short answer is: Yes, you can and should hire an attorney.

While Americans are often stereotyped as being litigious, the U.S. actually ranks fifth globally, with Germany, Sweden, Israel, and Austria having higher per capita lawsuit rates than the U.S.

Cases per 1,000 population:

Germany: 123.2

Sweden: 111.2

Israel: 96.8

Austria: 95.9

U.S: 74.5

What's more important than where the U.S. ranks, is why Americans can more easily bring lawsuits when they have been wronged. The U.S. has a contingency fee system, which allows attorneys to take on cases free of charge. If the client wins, the attorney gets paid, but if the client loses, there is no obligation to pay the attorney, and nothing is lost by the client. In addition, plaintiffs in the U.S. generally do not have to pay the opposing party's legal fees. Both these plaintiff facing rules lower the financial barriers and make lawsuits more accessible.  Shareholder rights attorneys generally work on a contingency fee basis. We understand that shareholders have already been harmed by the behavior of bad actors and need not incur further expenses to right the wrongs that have impacted their financial livelihood and decimated their investment portfolios.

Knowing there is little financial risk in hiring an attorney to represent your interests, you must evaluate whether you have a valid legal claim to bring an action. If you lost money in your portfolio because of market fluctuations due to macroeconomic or market and psychological factors, you typically cannot sue since all investing is inherently risky. Be cautious of anyone who tells you that they have a safe investment; it is likely a scam. If you were the victim of the below, you should seek counsel:

Broker Misconduct: This occurs when a financial advisor, broker, or investment firm gives you unsuitable recommendations, makes unauthorized trades, or misrepresents a risk.

Fraud or Misrepresentation: This happens if a company or other investment vehicle makes false or misleading statements that supported your reason for investing.

Ponzi Schemes: This happens when you are lured into a scheme that promises "guaranteed" or "high yield returns" in an unregistered investment. The scammer will pay profits to earlier investors with funds from more recent investors.

Breach of Fiduciary Duty: This happens if a fund manager or advisor fails to act in your best interests or if fiduciaries of a publicly traded company fail to act in the best interests of the company and its shareholders. 

If you have been harmed by one of these actions, you want to consider hiring an attorney to represent your interests. Keep in mind that while each of these types of misconduct involve financial investments, they are governed by different rules and regulations and prosecuted by different types of lawyers.

What type of law does Robbins LLP practice?

At Robbins LLP, we focus on fraud and breaches of fiduciary by officers and directors of publicly traded companies. If you discover that you lost money in your investment, we can help. First, we will evaluate some key factors about the company to assess whether it is able to withstand litigation. Companies that have a small market capitalization or are on the verge of bankruptcy do not typically have the financial resources to compensate shareholders for their losses. In these cases, shareholders may accept their losses, which can often be written off on their taxes, and sell their shares before the company gets delisted and can no longer trade.

If the company can financially withstand a legal challenge, we will evaluate the facts surrounding the alleged negligence or fraud. We take a deep dive into the relationships among the parties to assess conflicts of interest, we evaluate the stock transactions of the fiduciaries to determine if they sold stock based on insider information, and we compare publicly available information to company reports and records (usually obtained through an inspection demand) to determine if the company withheld relevant information to the investing public.

If we determine that the company and/or its fiduciaries acted negligently or fraudulently, we will proceed with a class action against the company or a shareholder derivative action on behalf of the company. In either case, we work closely with our shareholder clients to ensure the best possible outcome for the company and its shareholders.

While there are different nuances to each type of case shareholders can pursue, they generally follow the same process and structure. After a complaint is filed, the court will determine which shareholder will serve as lead plaintiff to represent the class (class action) or the company's interests (shareholder derivative action). Defendants will likely challenge the allegations in the complaint by filing a motion to dismiss (federal court) or a demurrer (state court) asking the court to dismiss the complaint based on inadequate pleadings. Most of the time, plaintiffs are given the opportunity – or multiple opportunities – to cure the defects in pleading. If the defects cannot be cured, the court will dismiss the complaint. If the defects can be cured, the court will accept a final pleading, and defendants will have to answer. The case will then proceed to discovery, which can include written discovery – interrogatories, requests for admissions, and requests for production of documents – and depositions. Around this time, the parties will typically start negotiating a settlement and may begin mediation; however, the case may still proceed through challenges to the facts (motion for summary judgement), certification of the class, and possibly even end up at trial.  

This oversimplified explanation does not reflect that shareholder actions take years to litigate. Notwithstanding the time commitment and unique challenges presented by this practice area, Robbins LLP attorneys have been dedicated to representing shareholder rights since 2002 and remain steadfast in our belief that the officers and directors of corporations should be held accountable for their actions that impact shareholders and deprive individuals and institutional investors of their hard-fought earnings and retirement. Investing is inherently risky, and shareholders should not be exposed to increased risk just because of the negligence or blatant fraud committed by a few self-serving fiduciaries. If you are suspicious of the price fluctuation of an investment, contact us for a free evaluation.

The information provided here is for general purposes and should not be considered as legal, financial, or investment advice.