Frequently Asked Questions
- What is a class action?
- What is a class period?
- What is a lead plaintiff?
- What are the obligations of a lead plaintiff?
- What is contingency fee litigation?
- What are the costs of being a plaintiff in a class action?
- Do I have to keep my stock to participate in a federal securities fraud class action?
- Do I have to keep my stock to participate in a shareholder derivative action?
- Do I have to keep my stock to participate in a corporate class action?
A class action is a representative lawsuit initiated by an individual or an entity and brought on behalf of other like-situated individuals or entities who have been harmed in the same or similar manner. Likewise, 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.
A class period is a range time within which a company is alleged to have committed improper conduct. If you purchased the securities of a company in question during the class period, then you are automatically a member of the class, regardless of whether you retain a law firm to represent your interests and/or prosecute claims on your behalf.
A lead plaintiff in a class action is a class member that is appointed by the Court to act as the representative of the class to pursue the litigation.
What are the obligations of a lead plaintiff?
An appointed lead plaintiff in a class action must be willing to testify at deposition and at trial, if necessary. Additionally, a lead plaintiff must be willing to keep in contact with his/her attorneys about the progress of the litigation and important decisions.
What is contingency fee litigation?
Contingency fee litigation refers to lawsuits where the attorneys only get paid if the lawsuit settles or if they win at trial. If the Firm is successful in obtaining a recovery for the class, the Firm will apply to the Court for a fee that fairly represents the work performed by the Firm and the risks associated with prosecuting the action. If the Firm is not successful obtaining a recovery for the class, then we receive nothing.
What are the costs of being a plaintiff in a class action?
There are no out-of-pocket expenses or fees paid by a plaintiff, no matter the outcome of the litigation.
Do I have to keep my stock 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 no matter your ownership.
Do I have to keep my stock to participate in a shareholder derivative action?
Yes. 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.
Do I have to keep my stock to participate in a corporate class action?
Yes. 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 maintain at least a portion of those shares through consummation of the transaction. A shareholder cannot sell his/her shares on the basis of any non-public information he/she might learn as a result of participating in the lawsuit.