Shareholders And Class Actions
What action should I take if I believe a company has defrauded me?
Well one action that you can take if you feel that a company has defrauded you is to file a class action lawsuit against the company or a suit against the company itself. Most likely if you've been wronged within a company or a publicly held company, you aren't the only one and so you're able to group together with other people like yourself and then go ahead with a class action suit according to the situation in which you were wronged.
What is a 'securities class action'?
A securities class action is when a group of investors, who purchased stock in a publicly held company and feel that they have been wronged, are able to press an action against a publicly held company. An example of that, would be, if you felt that there was something that wasn't disclosed to you in regards to the company, or if the company has taken a different action than what they had suggested they were going to do in a prospectus. You can then, therefore, gather other shareholders like yourself, which makes it less cost for the group to go after the company itself in order to receive damages.
What is a class period' in a securities case and how is it determined?
A class period is the period of time in which you actually held the security itself. So a good example, is if you owned a specific stock during a period of time, say from April 1st to July 1st. If you owned the stock during that period of time and the class action is against a company who acted improperly against that period of time, then you can be involved in the class action to receive damages for whatever it was the company did at that period of time.
How long does it usually take to settle or resolve a securities class action?
To resolve a securities class action can take quite a while. I have seen them go well beyond two, three, and four years before there is any award or damages paid.
If I've sold all my stock in a company being sued, can I still be a class member?
If you've sold all your stock in a company that's been sued, you still may be a class member. We've had that quite a bit here at the firm where people have sold stock and received statements from the class action stating that they can be a party, if they can prove that they owned the stock during the specific dates or the period of time that this action was filed.
How can I learn about a class action lawsuit?
There's quite a few ways to learn about a class action lawsuit, but the best way is through the Internet. You can go on the Internet and you can type in "class action" and usually put in the company's name that there's a class action against, and enroll on the spot in regards to the class action.
What are the most common causes of disputes between shareholders?
The most causes of dispute among shareholders have to do with the direction in which the company said they were going to take and they did take. It has to do with salaries. It has to do with bonuses. It has to do with stock options. It has to do with dividends that were supposed to be paid and weren't paid or dividends that the shareholders feel they should be paid and haven't been paid. A good example of that is the oil and gas companies. Shareholders feel that more and more of those companies with these huge profits should be paying out dividends to them as a shareholder versus being held inside the companies or paid in tremendous bonuses to the key executives.
What steps can a corporation take to minimize the likelihood of a shareholder's dispute?
The steps that a corporation can take to minimize the likelihood of a class-action suit are to be true to the statements that they've made in the prospectus in regards to how they tend to run their company, the direction, the salaries, the individuals, and if there were any changes that were to be made, to make that very public as soon as possible.
