{"id":352696,"date":"2016-04-04T10:42:08","date_gmt":"2016-04-04T15:42:08","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/consumer\/securities-law\/securities-class-action-lawsuits.html"},"modified":"2024-05-24T12:56:32","modified_gmt":"2024-05-24T17:56:32","slug":"securities-class-action-lawsuits","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/consumer\/securities-law\/securities-class-action-lawsuits.html","title":{"rendered":"Securities Class Action Lawsuits"},"content":{"rendered":"\n
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Securities Class Action Lawsuits<\/h1>\n
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\n By Oni Harton, J.D.<\/a> | Legally reviewed by Melissa Bender, Esq.<\/a>\n | Last reviewed\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

When investors purchase stock in a company and later discover that the company violated U.S. securities law, such as fraudulent reporting of financial data, there are choices to make. Investors can join or file a securities class action lawsuit.<\/p>\r\n

For example, a shareholder may have purchased $1000 of stock in a pharmaceutical corporation. It’s alleged that the company made misleading statements when reporting its financial data. When shareholders discover the misstatements, the value of the company’s securities drops to only $500. An investor has lost half their investment because of the company’s fraud.<\/p>\r\n

For an individual, this loss can be significant. However, it is often too small to justify one person suing a company. Securities class action litigation allows investors to join together to pursue recovery.<\/p>\r\n

Filing a class action complaint<\/a> allows individual investors to consolidate their claims into a single legal action when they share the same impact of the alleged wrongdoing. Securities class action cases can result in judgments or settlements worth millions of dollars. <\/p>\r\n

Read on to learn more about private securities class action lawsuits.<\/p>\r\n

Why Individuals Pursue Class Actions<\/h2>\r\n

Companies that violate federal securities laws cause economic harm to many people. Securities fraud class actions are the most common way a group of shareholders seeks to recover damages based upon claims of fraudulent statements connected with the sale or purchase of a security. A class action lawsuit allows a lead plaintiff who has suffered similar harm to a group to pursue claims on behalf of a group in a single court action.<\/p>\r\n

Types of Securities Class Action Claims<\/h2>\r\n

Though the specifics of every lawsuit differ, most securities class actions pursue similar legal claims<\/a> against defendants. Typical defendants include the following:<\/p>\r\n