Securities fraud is an attempt to alter the investment market in an illegal fashion; it can be committed by brokers, private investors, financial advisors, or even corporations. While most money loss on the market is simply a result of trends and market conditions, fraud still occurs, and much of it goes overlooked.
When you hire a broker to manage your investments, you trust them to abide by clear and definite laws that govern the fair management of your money. If you broker doesn´t contact you before making a trade, or you find you are losing money from your investments in strange ways, you may have good reason to suspect securities fraud.
Securities fraud class action lawsuits (SFCAs) generally arise when a publicly-traded company or corporation fails to disclose pertinent information to investors in a timely fashion. This information could be either good or bad. A securities fraud action might be caused by undisclosed news that makes a stock´s price rise (harming those who sold during the fraud period), or by news that makes the price of a stock fall (harming those who bought during the fraud period).
When to Pursue a Class Action Case
Class action lawsuits allow several victims to be represented at once in a single case, and are appropriate when all affected parties have suffered the same wrong or a similar injury. Sometimes, an individual´s loss is so small that it would not make financial sense for them to bring their own separate lawsuit to court. Class action lawsuits are designed to mitigate the cost of filing individual claims and prevent large corporations from escaping their actions without liability.
According to a report by Stanford Law School, in cooperation with Cornerstone Research, federal securities fraud class action cases rose in the second half of 2010. The full year had 176 filings – a 4.8% increase from 2009.
In the last few years, hundreds of investors have lost trillions in total stock value. While not all losses are due to fraud, you should consult with an experienced stock fraud lawyer to see if you have a case. For individuals who have suffered significant losses (over $50,000), class action cases are not always the best or most cost-effective way of recovering your damages. An individual securities fraud case or a securities arbitration claim may be more beneficial to you.
If you believe you have been the victim of securities fraud and would like more information about what type of case to pursue, please contact the experienced stock fraud lawyers at Colling Gilbert Wright today to set up a free case evaluation.