About Securities Fraud
Every year, investors lose billions of dollars as a result of various negligent, unethical, fraudulent or other wrongful conduct of various companies, officers, directors, affiliates, controlling persons and investment advisors. Through a securities class action lawsuit, a single or small group of investors can pursue claims against the wrongdoer on behalf of all similarly harmed investors. Similarly, an institution or individual may prosecute a securities fraud lawsuit.
Section 10(b), the PSLRA, and the Securities Exchange Act of 1934
Securities fraud, under Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5, and the Securities Act of 1933, occurs when a company or its representatives mislead investors into purchasing a company’s stock based upon inaccurate information about a company and its operations, financial condition or future earnings potential. The company either fails to disclose material adverse information or overstates their revenues or earnings which cause the company’s share price to be artificially inflated. Once the securities fraud is discovered, the value of the share price declines causing investors to incur significant losses. Victims in these cases have the right to recover their investment losses they suffered as a result of the securities fraud.
Section 11 and the Securities Act of 1933
Securities fraud claims under Section 11 of the Securities Act deal specifically with public offerings of stock, bonds or other types of securities where companies raise money on the capital markets. Companies and their management who engage in securities offerings, including initial public offerings, are liable to investors if any part of the registration statement, prospectus or proxy statement contained an untrue statement of material fact or omitted to disclosure or state a material fact necessary to make the statement not misleading.
About Our Securities Fraud Attorneys
For over 35 years, our team of Securities Lawyers have been handling a wide range of complex securities cases in order to recover investment losses for our clients. Our vast experience has demonstrated that cases are only won and successful results obtained when qualified securities lawyers thoroughly investigate, analyze and prosecute all relevant factual and legal issues which bear on liability, causation and damages. There is no shortcut to the thorough investigation and prosecution of a securities fraud case. While many firms tout their ability, you need to recognize that such cases should only be handled by well-qualified experienced securities lawyers.
Types of Securities Fraud