Not all losses suffered by an investor are the result of mere market fluctuation. Even the most cautious investor can fall victim to securities fraud. Securities differ from most other commodities in which people deal. They have no intrinsic value, but rather represent rights in something else- ownership rights in a company. The value of a share of stock depends on the profitability or future prospects of the issuing corporation; its market price depends on how much other people are willing to pay for it, based on their evaluation of those prospects. Any evaluation of a company will always be based, in part, upon the dissemination of information by the company to the market. The dissemination of material corporate information by the corporation is governed by federal law.
A securities class action is a class action filed by individual or institutional investors who purchased a company's stock during a time period (or "class period") when the said company disseminated false or misleading financial information to the public and who have suffered financial losses as a result of fraud or misconduct on the part of a company, its officers and/or directors, accountants or investment bankers.
The Securities Act of 1933 regulates public offerings of securities. It prohibits sales of securities which are not registered with the Securities and Exchange Commission (SEC) subject to certain exemptions, and prohibits fraudulent or deceptive practices in any offer or sale of securities.
The Securities Exchange Act of 1934 extended federal regulation to securities which are already issued and outstanding. The 1934 Act contains a number of provisions aimed at different participants in the securities trading process. The 1934 Act imposes disclosure and other requirements on publicly-held corporations and prohibits various manipulative or deceptive conduct in connection with the purchase or sale of securities. These provisions of the federal securities laws, designed to promote full disclosure of all material facts of a company, help to create a level playing field for all investors. On occasion, however, a company will fail to make full disclosure of all material facts, causing investors in the market place to pay an artificially inflated price for shares of the stock. Upon later full disclosure, the price of the company's stock will often collapse, leaving even the prudent investor with heavy losses. Such a company may be in violation of the federal securities laws. When a company fails to make full disclosure of all material information, individual and institutional investors may be entitled to recover their losses.
Securities and Investor Litigation
The firm's attorneys have extensive experience representing individuals and businesses who have sustained losses as a result of securities fraud, including actions alleging the issuance of materially false and misleading financial statements, and other statements regarding the business, operations and prospects of public companies listed on the New York Stock Exchange, the American Stock Exchange and the Nasdaq securities market. These actions have not only resulted in substantial monetary recoveries but, as with the firm's antitrust actions and consumer protection actions, have resulted in meaningful corporate governance reforms.
The extensive experience of the firm's attorneys in the area of investor litigation uniquely qualifies us to counsel and represent institutional and individual investors who have suffered investment losses in bonds, mutual funds and structured securities involving subprime debt.