Trading securities comes with inherent risks, which can make it profitable. It is not ethical or legal for companies to mislead investors in order to increase securities sales, according to the U.S. Securities and Exchange Commission. In cases where securities fraud happens, a security litigation lawyer can investigate and litigate a case on behalf of an investor or the investors.
If you believe that you or someone that you know is the victim of securities fraud, you have a right to consult a Sacramento security litigation lawyer. Your attorney can investigate and advise you on how to proceed, including filing a personal or class-action lawsuit against the company. Call Ben Crump Law, PLLC at 800-932-1441 for a consultation.
Types of Securities Lawsuits
There are several types of securities lawsuits. Choosing the right type of lawsuit to files depends on the specifics of the case. Your lawyer can advise you on this process. The types of securities litigation include:
- Class-action: Class-action lawsuits are lawsuits that have multiple plaintiffs. It is generally reserved for cases where the defendant had a large number of victims, which can happen in securities fraud cases.
- Securities fraud: Securities fraud is a crime where a company misrepresents its securities offerings to convince investors to purchase them. Companies are legally obligated to accurately represent their offerings without bias. This usually results in a class-action lawsuit for anyone that invested during a specific time period.
- Deal problems: Anytime a company tries to sell itself, it must accurately represent itself to the buyer. If it does not, any problems resulting from that deal become the responsibility of the company and its executives.
- Shareholder derivative cases: Shareholders can file a lawsuit to force the company that they invested in to more accurately represent their goals. Executives have a responsibility to put shareholder interests first and deviating away from that can result in a lawsuit where they are forced to correct the course of the company.
There are other types of securities lawsuits that are not covered on this list. Securities cases can be difficult to navigate due to the complexities of securities law.
For a free legal consultation with a security litigation lawyer serving Sacramento, call 800-709-1441
Statute of Limitations
The statute of limitations is a length of time that anyone has to file a lawsuit. The statute of limitations for securities fraud cases in California is five years and starts when the actual crime was committed. Five years is a relatively long time for a statute of limitations compared to other crimes; however, securities fraud is a difficult crime to uncover and can take several years before that happens.
It is important to note that while the statute of limitations may run out, it is possible to still hold someone responsible. Because of the complexities of securities fraud, it can be a widespread problem with multiple instances of the crime happening. This can lead to the responsible parties being sued for repeated instances of a crime even if the initial case has already expired. This tends to be the case when the person who committed fraud succeeds in the original crime.
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Class-action lawsuits are a special type of lawsuit that often appear in securities fraud cases. It is a lawsuit where a legal team represents multiple victims at the same time for the same crime. For securities fraud cases, criminals rarely target a single person. Instead, the company misrepresents its offerings to everyone, leading to multiple victims at the same time.
It is important to note that although there may be a class-action lawsuit against a company, plaintiffs are not required to participate in the class-action lawsuit. They can opt-out and have a Sacramento security litigation lawyer represent them individually. In most cases, plaintiffs prefer the class-action lawsuit. They tend to opt-out if the personal loss because of the crime is so great that they cannot recover enough from the class-action.
Companies with investors have fiduciary responsibilities, or a responsibility to properly handle investors’ money. As a result, those companies must act in the best interests of their stakeholders first. Some of the fiduciary responsibilities that companies hold include:
- Accurate representation: Companies must always represent themselves and their offerings accurately to investors. Any attempt to mislead or withhold required information is a breach of responsibility.
- Guardianship: Companies must do what is appropriate to protect the company and its investments. Scandals and bad financial decisions risk investors’ investments and may classify as a beach of responsibility.
- Profit generation: Company leaders have a responsibility to generate profits so that they can pay back investors. It is one of their highest responsibilities.
Companies and their leaders have more responsibilities that are not covered on this list. Anytime they fail in these responsibilities, there is the potential for a lawsuit. That is why leadership teams within companies are focused on keeping their priorities on serving stakeholders.
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Establishing a Legal Case
Establishing a securities fraud case takes preparation. It takes a significant amount of evidence to create a case, especially if it turns into a class-action lawsuit. A lawyer may help with evidence-gathering and preparation to coordinate a large securities lawsuit. If you have information that may indicate that securities crimes occurred, you can consult a Sacramento security litigation lawyer for a further investigation.
Contact a Security Litigation Lawyer with Ben Crump Law, PLLC Today
Securities litigation is a complex area of law. If you or someone that you know has information about a securities problem, you can consult a lawyer to see if there is a case. Call Ben Crump Law, PLLC at 800-932-1441 for legal assistance. We can review your case and discuss your legal options.