Securities Fraud Class Actions

Corporate Fraud Costs Investors Billions Of Dollars Each Year

Every day, headlines reveal instances of corporate misconduct that costs investors hundreds of billions of dollars annually. Corporate fraud affects investors large and small, those new to investing and the most experienced shareholders, and it can be blatantly obvious or designed to go undetected.

Unfortunately, no shareholder is immune and greed continues to fuel corporate executive behavior as evidenced by repeat offenses by companies that continue to act fraudulently time and time again. The government lacks the resources to police all the companies traded on America’s stock exchanges, so investors must be vigilant in protecting their assets.

Robbins LLP is committed to the principle that the officers and directors of publicly traded corporations should be held accountable to the true owners of the enterprise – the stockholders. When poor decisions, disregard for corporate policies, and blatant misconduct by officers and directors cause the value of a company’s stock to decline, shareholders can seek justice.

What is a Securities Fraud Class Action?

A securities fraud class action is a lawsuit filed by investors who bought or sold a company’s stock within a specific period of time (known as a “class period”) and suffered economic injury as a result of violations of the securities laws. A securities fraud class action is usually filed after some previously undisclosed truth about the company is revealed to the public, which is so egregious that it causes investors to sell their shares and the price of the company’s stock to decline. Because a small to moderate sized shareholder would not likely bring a class action on their own behalf, a class action allows these stockholders to seek recovery from the wrongdoers without having to individually retain a lawyer and pay legal fees. It is critical that shareholders activate their litigation rights to protect their financial interests when corporate executives harm their investment.

What Kind of Wrongdoing Can Be Addressed Through a Securities Fraud Class Action?

The Securities Act of 1933 and the Securities Exchange Act of 1934 are federal laws that regulate the securities industry and protects investors. The laws require that companies whose stocks trade on national exchanges, as well as their officers and directors, provide the investing public with complete and accurate information regarding their companies. Securities fraud occurs when corporate executives disseminate false information that seeks to manipulate financial markets. Shareholders are injured when they rely on this false information to inform their decision about purchasing a company’s stock.

Types of securities fraud include:

Making fraudulent misstatements that manipulates stock prices
Intentional concealment, omission, or manipulation of financial information
Insider trading on information not known to the investing public
Ponzi and pyramid schemes in which money from new investors is used to pay the returns promised to prior investors
Pump-and-dump schemes in which people use Internet chat rooms and forums to spread fraudulent information about stocks with the intent of increasing the price of the stock allowing them to “dump” their stock at an unreasonably high price

Who Leads the Class Action?

After an initial complaint is filed, all shareholders have 60 days to file a motion with the court to be appointed lead plaintiff. The court is required to appoint as lead plaintiff the shareholder or group of shareholders who represent to the court that they have incurred the greatest financial loss due to the company’s malfeasance and can adequately represent the interests of all shareholders against the company. Once the court appoints the lead plaintiff, that person or group of people will make decisions regarding the litigation going forward; the other shareholders are considered absent class members. If the lead plaintiff is successful in obtaining a settlement from the company, the absent class members will be informed of the settlement and have a chance to claim their share of the settlement proceeds.

How Do I Know If I Should Opt Out of a Class Action?

Shareholders have the option of pursuing a direct action against the company. In such cases, the shareholder “opts out” of the class action and stands alone against the company. A shareholder who opts out will not be bound by the court’s decision and will not share in any recovery obtained by the lawsuit. A shareholder who opts out will usually have substantial losses in the company’s stock and the financial resources to obtain their own attorneys. Opting out provides shareholders with greater control over the litigation and the potential to achieve a larger recovery. However, it is not a decision to make lightly, as such actions are typically only advisable when the individual shareholder can allege new claims or name defendants not sued in the original class action.

An Answer for Defrauded Shareholders

Our services on behalf of shareholders have a proven track record of protecting and enhancing shareholder rights and value, holding directors and officers accountable for corporate misconduct, and achieving financial settlements for harmed investors. Our firm’s experienced attorneys include former federal prosecutors, defense counsel from top corporate law firms, in-house counsel from leading financial institutions, and career shareholder rights litigators. Our attorneys have litigated in almost every state in the country and are not intimidated by power financial players or an uphill battle. We have successfully prosecuted securities fraud class actions that have recovered millions of dollars for stockholders who lost money as a result of violations of securities laws, including:

Served as co-lead counsel in recovering $61.5 million for Titan Corporation’s shareholders following alleged misrepresentations by certain officers and directors of the company regarding the company’s financial health and compliance with the Foreign Corrupt Practices Act in one of the largest securities fraud class action recoveries in San Diego history
Served as lead counsel to secure almost $6 million on behalf of stockholders who purchased Star Scientific, Inc. stock based on misrepresentations that John Hopkins University School of Medicine was involved in the clinical development and testing of the company’s main product, which was made to secure the equity financing the company needed to stay in business
Served as co-lead counsel in numerous deSPAC class actions in which shareholders were damaged when fiduciaries failed to disclose material information about the acquisition of certain SPAC companies

Have Your Investments Been Harmed Due to Securities Fraud?

Robbins LLP assists individual and institutional shareholders who demand corporate accountability, integrity, and honesty from their corporate executives by taking aggressive legal action against company insiders, such as the executive officers and board members, who harmed the corporation through their wrongdoing. The proven and aggressive class action attorneys at Robbins LLP can seek monetary damages for corporate misconduct that resulted in a decrease in the value of your stock.

Robbins LLP offers no cost representation. We work on a contingency fee basis, meaning we advance all attorneys’ fees and expenses incurred by the litigation. If we are successful in obtaining a monetary recovery or substantial non-monetary benefit for the corporation or the shareholders we represent, we will seek to have the court approve our fee request, which will be paid by the corporate defendants and/or their insurance carriers. Robbins LLP never seeks reimbursement for attorneys’ fee or costs directly from our stockholder clients.