Securities litigation is a highly specialized and multifaceted legal practice. Securities laws are extremely complex and involve long procedures, sensitive matters and high stakes. There are numerous types of securities litigation cases, and the claims made present risk of major damage compensation, adverse publicity, and other grave exposures and risks. That is why it is important to consult a business litigation lawyer.
What is Securities Litigation?
Securities litigation includes the lawsuit that is filed by the investors, who have sold or purchased the securities of a company in a certain time period and went through economic injuries due to the violation of securities laws. Securities litigation cases typically involve omissions or misleading statements from the contract, agreement and/or other documentations.
This is when a company includes an untrue fact or statement regarding a company, intentionally omits certain facts about the company, or makes misleading statements. Securities litigation can be of various types, depending on the situation and terms agreed upon by all parties involved.
Types Of Securities Litigation Cases
When false statements or other wrongdoing by a company results in the investment losses of another company or individual then a wide variety of claims can be asserted by the investors to file for damages incurred. It is essential to understand what conditions a legal claim can be made and how it can assist and protect you from potential harm or seek damages in case of losses suffered due to false statements of a company.
It is important that you contact a business litigation lawyer to assist you when you are about to invest in a company, or when you notice anything unusual in your investments so that the securities litigation claims can be evaluated as per your situation.
You must also understand that all securities litigation cases are not equal. They can be originated in numerous venues and federal and state laws are to be applied accordingly. Following are some of the main types of securities litigation cases you should be aware of:
Securities litigation fraud cases can be classified into two types:
Class Action Cases
Securities fraud cases enables investors to recover the damages and losses they suffered because of corporate fraud in a specified period of time. Securities fraud includes various types of mismanagement or accounting fraud.
Securities class action cases are filed by a business litigation lawyer on half of investors who experienced financial losses because of securities regulation violations or corporate fraud. An investor can file for and recover the damages purchased within a certain class period. This class period refers to the amount of time the fraud falsely inflated the share price.
In such cases, the lead is taken by one of the plaintiff that is appointed by the court in order to represent the group of plaintiffs. This lead plaintiff is the one that make the selection of a lead counsel and assists in directing the litigation direction. In order to determine who the lead plaintiff should be, the court evaluates the individual with the biggest financial interest, as well as the nature and extent of the fraud.
In certain situations, the losses of the investor could be so drastic or unique that it would not be in their best interest to stay in the already filed class action case. In such a situation, an individual case can be filed on the behalf of the investor. Such cases are known as opt-out cases.
Shareholder Derivative Cases
These lawsuits are filed against an organization by existing shareholders for the restoration of shareholder value, establishment of improved corporate governance, elimination of corporate assets wastage. In certain situations, these shareholder derivative cases might also aim to recover financial damages and losses that took place because of negligent management, conflict of interest, and/or insider self-dealing.
The shareholders file these shareholder derivative cases on behalf of the organization against the director of office holding fiduciary obligations for maximizing shareholder value for the shareholders and the company. It is important that the shareholder owned certain shares of the company at the time of the said wrongdoing.
Almost all of these shareholder derivative lawsuits include enhancements to the corporate governance. The best practices aims to establish better parallel interests between the corporate management and shareholders.
Deal Cases (Mergers and Acquisitions)
The securities litigation cases also include corporate executives that breach their responsibilities to enhance the shareholder value in regards to the corporate merger or takeover. When a company is put up for sale, it is essential for the shareholders to make sure that the process utilized and the share price is unbiased and fair.
In the deal cases, the plaintiffs are the investors seeking to enhance the sale price, eradicate coercion, and demand for the complete disclosure of important facts, which includes the accurate state of the organization, the compensation structure of the company before the approval of its proposed transaction.
These deal cases can be filed against the buyer or the seller, as well as financial institutions, directors, and/or officers involved in the merger and acquisition of the said company.
If your business is facing a litigation case from the government or shareholders, or if have suffered losses due to the misrepresentation or fraud the company you invested in then it is important that you have an experienced business litigation lawyer assisting you with the case. A legal team that has handled and successfully won such cases before is an ideal one to jump right in and handle the entire case for you, assist in creating the right strategy as per your situation, and attain the best possible result for you and your business. If you are looking for a business litigation lawyer, feel free to contact Shiner Law Group and get a free evaluation of your case by our experienced business litigation lawyers.