Where the firm concentrates its work.

A securities fraud class action is a lawsuit brought on behalf of every investor who bought a company’s stock while the market was being given a false picture of the business. When a company or its executives make statements that are untrue, or leave out facts a reasonable investor would want to know, the share price can stay artificially high. When the truth eventually reaches the market, the price falls, and whoever is holding the stock absorbs the loss.

The point of a class action is that no single shareholder has to fund a case against a public company alone. One suit is filed on behalf of everyone who bought during the same window, and the court answers the common questions once, for the whole group.

The class period

Every one of these cases is defined by a class period, the span between the first misleading statement and the day the truth came out. If you bought shares inside that window, you are generally a member of the class. If you bought before it opened or after it closed, you usually are not, even if you lost money. That single date range is the first thing we look at when someone contacts us, which is why the case pages in our archive list the class period up front.

Who can take part

You do not have to hire a lawyer or file anything to be a member of a class. If the court certifies the class, everyone who fits the definition is included automatically unless they choose to opt out, and any eventual recovery is distributed through a claims process. What you do need to do is keep your records, trade confirmations, monthly statements, and the dates, quantities and prices of your purchases and sales. Losses are calculated from those numbers.

Lead plaintiff, in plain terms

The federal securities laws let investors ask the court to be named lead plaintiff, the shareholder who directs the litigation and selects counsel for the class. When a case is filed a notice is published, and investors generally have 60 days from that notice to move for appointment. Courts typically favor the investor with the largest financial interest who is otherwise suitable to represent the class. Serving is voluntary; declining does not affect your right to share in a recovery as an ordinary class member.

When a public company agrees to be acquired, its board of directors is not simply picking a buyer. The directors owe fiduciary duties to the shareholders who own the company, and those duties do not switch off because a deal has been announced. The board is obligated to seek the best price reasonably available, and to be honest about how it got there.

Most of the merger matters in our archive began the same way: a deal was announced at a price that looked low against the company’s own performance and prospects, and we started asking how the board arrived at it.

What we look at

• The price Whether the offer reflects what the business is actually worth, measured against recent trading history, analyst expectations, comparable transactions and the company’s own projections.
• The process Whether the board genuinely tested the market, or negotiated with a single bidder behind closed doors before signing.
• Deal protections No-shop clauses, matching rights, termination fees and lock-ups that can discourage a higher competing offer from ever surfacing.
• Conflicts Management continuing on with the buyer, change-of-control payouts, or a controlling stockholder sitting on both sides of a going-private transaction.
• Disclosure Whether the proxy or tender offer materials give shareholders the financial analyses and assumptions they need to vote or tender intelligently.

The remedy sought in these cases is not always money. Sometimes it is fuller disclosure before the vote, sometimes a renegotiated price, and sometimes damages after the fact. What they have in common is a shareholder insisting that the board answer for how the company was sold.

This part of the practice is unusual, and it exists because of a gap in who actually pays for insider trading. The firm represents option market makers for losses they sustain when public customers trade on illegal inside information.

Market makers are the participants who make the options markets work. They stand ready to quote both sides of a contract and take the other side of the public’s orders, so an investor who wants to buy or sell an option can do so at a fair price rather than waiting for a matching counterparty to appear. That liquidity is what makes an orderly options market possible, and it is supplied by firms that must honor their quotes without knowing who is on the other end.

Which is exactly what makes them vulnerable. Someone holding material, non-public information, an unannounced acquisition, a pending earnings collapse, a regulatory decision no one outside the company knows about, can convert it into a large, low-risk options position. Options are leveraged, so the payoff is outsized. And when a profit is gained at one end of an options trade, a loss is sustained at the other: by the market maker who took the other side in good faith.

Why private cases matter

Government agencies pursue insider trading, but they cannot catch every occurrence, and an enforcement action does not necessarily make the counterparty whole. The firm took on the work of representing market makers directly, so that these losses land where the wrongdoing was rather than on the participants who were doing their job.

The firm has represented investors against brokers and brokerage firms in arbitration before FINRA (formerly the NASD) and the New York Stock Exchange. Most brokerage agreements require disputes to be resolved in arbitration rather than in court, which means a claim against a broker follows its own procedure and its own timetable.

An important starting point: a broker is not liable simply because an investment lost money, or because the advice turned out badly. Where a recommendation had a reasonable basis when it was made, a loss is not by itself a claim. The cases worth bringing are the ones where the broker’s conduct, not the market, caused the damage.

The claims we see most often

• Unsuitability The broker recommends securities clearly wrong for the customer’s stated objectives. The classic example is a retired investor who asked for fixed income and safety and ends up holding over-the-counter or new-issue stocks.
• Failure to diversify An account concentrated in a single stock or a single sector, so that one company’s trouble takes the whole portfolio with it.
• Unauthorized trading Trades placed in your account without your consent. If this happens, object immediately and put the objection in writing, silence is often read later as approval.
• Failure to execute You gave a sell order and it was never carried out, or the broker became unreachable while the position moved against you.
• Misrepresentation Being told there is “inside information,” being promised a stock is about to “take off,” or being given a picture of an investment’s risk that does not match reality.

Alongside its securities work, the firm has investigated consumer matters, including large automotive recalls, where manufacturers called back vehicles to correct defects in safety-critical systems. Those investigations look at what the manufacturer knew, when it knew it, and what owners and lessees were told in the meantime.

If you own or lease a vehicle or product that has been recalled and want to understand where you stand, the same intake applies: tell us what you have, when you got it, and what you were told. Recall matters documented by the firm appear in the case archive alongside the securities cases.