A securities fraud class action is a lawsuit filed by investors who bought or sold a company’s publicly traded securities within a specific time period (known as a “class period”) and suffered economic injury as a result of violations of the securities laws.

A class period is the range of dates within which a company allegedly engaged in improper conduct. In securities fraud cases involving misleading statements or omissions, the class period generally starts when a company makes an untrue statement of material fact about the company or fails to disclose a material fact necessary to render other statements not misleading. The class period generally ends when the company fully discloses the truth to the investing public. A class period may be shortened or extended during the course of litigation.

A lead plaintiff is a shareholder or group of shareholders who volunteer to represent other similarly situated shareholders of the corporation and agree to act in the best interests of the class. The court appoints as lead plaintiff the shareholder(s) who can establish they have the largest financial interest in the relief sought by the class, which typically means they suffered the greatest financial loss due to the company’s wrongdoing. The lead plaintiff(s) must also have claims typical to the other class members and must be able to adequately represent the interests of the class. The lead plaintiff gets to select and retain counsel to represent the class. The lead plaintiff stays informed about significant developments in the case and works with class counsel to make important strategic decisions regarding the conduct and disposition of the litigation.

Shareholders interested in acting as lead plaintiff for the class must file their application to serve as lead plaintiff no later than the 60th day following the first filing of a class action complaint alleging federal securities violations. This deadline is strictly applied. If you wished to act as lead plaintiff but missed the deadline, you will still be considered a part of the class if you purchased your shares during the class period. If the case results in a settlement, you will be able to claim your share of the settlement proceeds.

The stockholder who files the initial securities fraud class action is required to give all stockholders of the company notice of the filing. Once that notice goes out, as noted above, stockholders have 60 days to move to be appointed lead plaintiff. Once that notice occurs via press release, the law firms that specialize in shareholder rights/securities fraud litigation continue to notify stockholders of the case to ensure the best possible candidate is identified as lead plaintiff.

There can only be one operative complaint for each violation. Multiple cases alleging the same violation will be consolidated by the courts and litigated as one action. If you purchased your shares during the class period you will be able to claim your share of the settlement proceeds upon positive resolution of the matter.

If you do not qualify as a lead plaintiff your rights will be protected by the parties leading the litigation. If the case results in a settlement, a claims administrator will notify you of the settlement and provide instructions on how to submit a claim for your share of the proceeds.

A securities fraud class action typically takes two to three years to litigate. However, each case is unique and some cases can be resolved in less time, while others may take longer. Certain factors that can influence the length of a securities fraud class action include challenges to jurisdiction and venue, discovery disputes, judicial changes, and appeals, to name a few.

No. Plaintiffs in a securities fraud class action brought by Robbins LLP are not responsible for paying attorneys’ fees or expenses. All costs and expenses of the litigation are advanced by Robbins LLP. We only recover our fees and costs if we are successful in obtaining a monetary recovery or substantial non monetary benefit for the class whose interests we represent. If we prevail, our fees and expenses are paid out of the sums recovered for the class.