Inaccurate and misleading information about a corporation can cause investors to purchase the corporation’s securities at artificially high prices. Securities fraud actions enable investors who have relied on such information to recover losses caused by the decline in security value that results from discovery and public disclosure of the fraud.
Kohn Swift has recovered millions of dollars for institutional and individual investors in securities fraud lawsuits.
SECURITIES FRAUD LITIGATION
Violators of certain security law provisions may be liable for damages caused by their violations. Major federal securities laws include the Securities Act of 1933 and the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act (PSLRA) of 1995 also has a significant effect on securities class actions.
Kohn Swift successfully litigated a case under the securities laws on behalf of stockholders of a company whose executives engaged in an illegal options backdating scheme. As a result of the scheme, the company’s stock traded at artificially high prices. When news of the options backdating scheme was revealed, the stock price declined, and investors suffered losses. Kohn Swift successfully obtained a settlement fund on behalf of a class of all injured investors. In re Marvell Technology Group, Ltd. Securities Litigation (N.D. Cal.)
RELIEF IN SECURITIES FRAUD LAWSUITS
Litigation under the securities laws seeks recovery of losses on behalf of a class of injured stockholders as well as injunctive relief preventing the company from engaging in prohibited practices. Relief often includes the institution of new policies and reporting procedures to ensure compliance with securities laws. Policies and procedures may also be added to ensure that any potential future misconduct is quickly identified and remedied. In the case of mergers and acquisitions litigation, relief can also include additional material disclosures provided to shareholders.