What Is A Securities Class Action Lawsuit?
In recent years, there have been more than 6,300 securities class action lawsuits filed in the United States. These lawsuits range from corporate securities fraud to subprime-related securities scams. Whether you’re interested in taking part in a class action lawsuit, or if you’re looking for information on opting out of such an action, this article has what you need.
Subprime-related securities class action
The recent $730 million settlement of a subprime-related securities class action lawsuit is one of fifteen largest settlements ever. It also marks the third largest recovery in a non-restatement case. The settlement includes monetary contributions from a number of underwriters, auditors, and others.
The subprime mortgage market has been hit with several new lawsuits. Banks and lenders that made loans in the subprime segment are facing claims from both borrowers and shareholders. These suits are based on allegations that the companies knew or should have known about the risky nature of subprime loans.
Plaintiffs in many of these cases allege that the companies were grossly undercapitalized, had inadequate reserves for loan losses, and misled investors about the nature of their lending practices. These allegations are reminiscent of similar suits filed during past financial crises.
Although some of these cases have reached a dismissal motion stage, many have not. As a result, the credit crisis litigation wave is reaching its fifth year.
Corporate securities fraud
A corporate securities fraud class action is a lawsuit filed by plaintiffs on behalf of a group of investors. This lawsuit may involve fraudulent stock manipulation, misrepresentations about the value of a security, or earnings announcements.
The SEC is required to provide accurate information to investors. When a company has to raise money, it is usually required to file a prospectus with the SEC. If the information provided is inaccurate, the company is in violation of the Securities Exchange Act of 1934.
Life sciences companies face unique challenges when it comes to securities fraud claims. The products and processes involved in developing a new medical product are often risky. This can result in a loss of value for shareholders. In the case of a failed clinical trial, the stock price can plummet.
The most common claims are under Rule 10b-5 and Section 11 of the Securities Act of 1933. These claims relate to deficient accounting, insider trading, and poor governance.
Opting out of a class action
Whether to opt out of a securities class action depends on a number of factors. First, investors must assess their legal and financial interests. Second, they should discuss their options with a knowledgeable attorney. Lastly, investors should calculate the damages they may be entitled to recover.
Although most securities class actions are settled, a few cases have gone to trial. In some recent cases, dozens of major investors have brought opt-out actions against the defendant.
In most cases, opting out of a class action isn’t a good decision. However, in certain circumstances, it may be worth considering. There are many reasons why investors may prefer to remain in a class.
Some of the most common plaintiffs in opt out cases are pension funds. These institutions invest in various investment companies, including mutual funds and hedge funds. When these investors lose money, they often find it difficult to sue the company individually. The prospect of a large settlement can help them decide whether or not to settle.
SCAC database of 6,309 securities class action lawsuits
The Securities Class Action Clearinghouse (SCAC) is a public database that is devoted to research, news, and discussion about securities class action lawsuits. It is modeled after Stanford’s Intellectual Property Litigation Clearinghouse and Civil Rights Litigation Clearinghouse. It provides information about securities class action lawsuits, which allows corporate executives, policy makers, and lawyers to keep up with recent news, updates, and developments.
The SCAC team maintains a filings database of more than 3,600 securities class action lawsuits. Its purpose is to study class action securities fraud litigation and to make empirical contributions to the field. The filings database contains copies of more than 43,000 litigation-related materials.
The database can be accessed by authorized users only through a User ID. During registration, users must ensure that their information is accurate. They must also treat their User ID as confidential. If they do not update their registration information, the SCAC may deny them access.
While the data provided by the SCAC database is useful, it is not intended as legal advice. If you are interested in using the data for litigation purposes, you should seek permission from the appropriate rights holder. If you are not certain whether you have the necessary rights to use the data, contact the Stanford Computer Application Center to discuss your concerns.