What is a class action?
A class action is a representative lawsuit initiated by an individual or entity and brought on behalf of other like-situated individuals or entities who have been harmed in the same or similar manner. Aggregating the claims of many injured investors in a class action makes particular sense where the harm to any one investor is insufficient to justify extremely costly litigation against a well-funded defendant.
What is a class period?
A class period is a specific period of time in which misconduct is alleged to have occurred. Only those who were affected by the alleged wrongdoing in the specified class period are eligible to participate in the case and recover for their injuries.
What are the obligations of a lead plaintiff?
A lead plaintiff in a class action must represent the best interests of the class and actively participate in the prosecution of the litigation. A lead plaintiff must be willing to participate in document discovery and possibly appear for a deposition and/or trial. In addition, a lead plaintiff cannot have any interest antagonistic to or in conflict with other shareholders concerning the claim alleged in the complaint or any relationships with any of the named defendants that would in any way impair his/her ability or incentive to obtain the best possible result for all members of the class. The lead plaintiff’s name will appear in the complaint.
Who pays for a class action lawsuit?
The Firm works on a contingent basis, meaning that the Firm will advance all costs and expenses and be paid for its work only if the lawsuit results in a settlement or other successful outcome. If that happens, the Firm must apply to the Court to award its fees and expenses. The Court determines the fee and expense award after taking into consideration a number of factors, including the quality of the Firm’s work. Under all circumstances, neither the plaintiff nor the members of the class assume personal responsibility for paying the Firm.
Do I have to keep all of my shares to participate in a corporate class action?
No. A plaintiff in a corporate class action must have purchased his/her shares in a company prior to the announcement of the transaction at issue and agree to keep at least some shares through consummation of the deal.
Do I have to keep my shares to participate in a federal securities fraud class action?
No. As long as you purchased your securities during the class period, you will be eligible to participate in any recovery obtained for the class.
What is a shareholder derivative action?
A shareholder derivative action is a specific type of case brought by a current shareholder of the corporation against its officers and/or directors based on the claim that they violated their fiduciary duties to the corporation and caused it to suffer an injury, typically in situations where the company has violated federal securities laws, banking laws, environmental laws, and worker health and safety laws.
Do I have to keep all of my shares to participate in a shareholder derivative action?
No. A plaintiff in a shareholder derivative action must: (a) currently own stock in the company; (b) have continuously held his/her stock in the company since the time of the alleged wrongdoing; and (c) agree to retain at least some of those shares until the action is resolved.
What is a books are records action?
Many states have laws that allow shareholders to request that the company produce its books and records, including board minutes, board presentations, and certain financial information. The request for books and records must be for a valid purpose, which includes investigating potential wrongdoing by members of the board and/or senior officers. To bring such a demand, among other things, a shareholder must provide proof of current ownership of the company’s shares and must have held at least one share of stock continuously since the time of the alleged wrongdoing. If the company does not produce the requested books and records within a short period of time, the shareholder can initiate a lawsuit to force the company to do so.
If you have any other questions, please contact us.