Protecting Investors from Corporate Fraud
When people invest in stocks, they rely on the information companies share with the public. Financial reports, press releases, and statements from company leaders help investors decide where to put their money.
If that information turns out to be misleading or incomplete, investors can end up losing a lot of money. Securities class action cases focus on companies that may have provided false information, hid important risks, or misled shareholders. At Kaskela Law, we represent investors in these types of cases and work to help them recover losses caused by corporate fraud.
Kaskela Law only handles shareholder litigation on a contingent basis. There is never any cost to our clients, and the firm only ever receives compensation for its services if it is able to achieve a monetary recovery or other recognizable stockholder benefit. We encourage you to visit our featured cases page to review some of our notable results in securities class action cases, and to contact us today if you have suffered a financial loss and suspect potential corporate wrongdoing.
Schedule your no-obligation free consultation today!
What Is Securities Class Action Litigation?
A securities class action is a lawsuit filed on behalf of a group of investors who were financially harmed by the same problem – when a public company violated securities laws by providing misleading information to investors, causing them to pay too much for shares of the company’s stock.
For example, a company might report strong financial results even though the business is struggling. Investors rely on those reports when they purchase shares of the company’s stock. When the truth eventually comes out, the stock price drops, leaving those investors with financial losses.
Instead of filing many separate lawsuits, investors can bring one class action case that represents everyone who was harmed by investing in a company during a specific time period.
Common Situations that Lead to Securities Class Actions
Securities class action lawsuits are often initiated after new information becomes public and investors realize they may have been misled. Several situations commonly give rise to these types of cases:
Misleading financial reports
Public companies regularly release financial reports that show their earnings and overall performance. Investors rely on these reports to judge whether a company is doing well.
If the numbers are inaccurate or misleading, investors may make decisions based on false information. Once the company corrects the information or reports the truth, the stock price may drop, causing investors to lose money.
False or misleading public statements
Company executives often talk about their business during interviews, earnings calls, or press releases. These statements can significantly influence how investors view the company.
If a company’s leadership makes statements that create a false picture of the company’s financial health or future growth, investors may rely on that information when buying shares.
Failure to disclose important information
Public companies must share certain information that could affect investment decisions. This includes serious risks, regulatory issues, or major business problems.
When companies leave out important details, investors may not fully understand the risks they are taking.
Artificially inflated stock prices
Misleading information can cause a company’s stock price to rise higher than it should. Investors may buy shares while the stock price is inflated.
When the truth comes out, the stock price often falls, and investors who purchased at the higher price lose money as a result.
How Securities Class Action Lawsuits Work
Securities class action cases follow several steps:
- Investigation: Attorneys begin by reviewing company statements, financial reports, and market activity to determine whether securities laws may have been violated.
- Filing the lawsuit: If the investigation shows there may be a valid claim, a lawsuit may be filed on behalf of investors who purchased the company’s stock during a specific time period, which is referred to as the “class period.”
- Lead plaintiff appointment: Sixty days after the initial class action complaint is filed, investors with large losses file petitions with the court to be appointed as the lead plaintiff in the case. There is a presumption that the investor with the largest loss should serve as the lead plaintiff. This person will represent the interests of the entire class.
- Discovery and case development: Both sides gather documents, review company records, and question witnesses to build their cases.
- Settlement or trial: The overwhelming majority of securities class actions end up resolving in a settlement where companies agree to pay compensation to affected investors. If a settlement cannot be reached, the case may go to trial.
Who May Be Eligible to Join a Securities Class Action
Investors may be able to participate in a securities class action if they purchased shares of a company’s stock during the time period covered by the lawsuit and later suffered financial losses.
All investors, whether retail or institutional (such as pension funds or investment firms), are eligible to participate in the class action process, and to share in the recovery if there is a settlement or favorable judgment.
Possible recovery for investors
If a securities class action is successful, investors will receive compensation for losses related to the alleged misconduct. The money may come from a settlement or a court judgment.
After a settlement is reached, eligible investors can submit claims. The settlement funds are then distributed based on factors such as how many shares an investor purchased and the losses they experienced.
While not every case results in full recovery, these lawsuits can help investors recover part of the money they lost. At Kaskela Law, we ensure that our shareholder clients have submitted the proper claim forms when there is a case settlement to help ensure that they recover the maximum amount of money they are entitled to recover.
How Kaskela Law LLC Represents Shareholders
Kaskela Law focuses on representing investors in complex securities cases by investigating potential violations of securities laws and taking action when corporate misconduct may have harmed shareholders.
By bringing securities class action lawsuits, the firm works to hold companies accountable and pursue financial recovery for investors who were affected by misleading statements or other improper conduct.
Speak with a Shareholder Litigation Attorney to Learn Your Legal Rights and Options
Investing always comes with some risk, but it should never mean being misled. You deserve clear, honest information when making decisions about your money.
If you’ve experienced losses and believe misleading information may be to blame, it may be time to take a closer look at your legal options. Securities class actions give investors a way to stand together, seek accountability, and pursue recovery.
Contact us today for a confidential case review. We can help you understand your rights and determine whether you may have a claim.
We encourage you to review our featured cases page to see to see what we have been able to accomplish in the recent past in select securities class action cases, and to contact us today if you would like for us to investigate any suspected corporate wrongdoing.