What is Securities Fraud?
The federal securities laws were founded upon principles of full and fair disclosure. Information about a publicly traded company, its financial health and its products/services, whether positive or negative, is reflected in the company's stock price. When the information is truthful and accurate, the company's stock and bond prices are fairly valued. However, when a company intentionally or recklessly disseminates information that is false or fails to disclose all relevant information, the stock or bond price can become artificially inflated or buoyed. Investors are later damaged when the truth becomes revealed and the price of the security plummets.
This is securities fraud.
What is a Securities Class Action?
A securities class action is brought by an investor on behalf of himself and all other similarly situated investors (i.e., the Class) who purchased a company's debt or stock in the same public offering or who purchased the company's debt or stock in the same period of time – i.e., Class Period (the range of dates within which the company is alleged to have been engaged in improper conduct).
What is the Private Securities Litigation Reform Act of 1995 (or the "PSLRA")?
The PSLRA was enacted by Congress, in part, to increase the role of institutional investors in federal securities litigation.
What is a Lead Plaintiff?
A lead plaintiff is the person, entity or group whom the court designated to prosecute the lawsuit on behalf of the entire Class. The court selects the class member or members most capable of representing the interests of "absent" class members. The PSLRA created a statutory presumption that the class period investor with the largest financial losses, who are otherwise typical of the "absent" class members and are adequate to represent those class members, are considered the "most adequate" plaintiff. Generally, the attorneys selected by the lead plaintiff are approved by the court as lead counsel to pursue the litigation.
How can a Pension Fund become a Lead Plaintiff?
Under the PSLRA, the first plaintiff to file a federal securities class action lawsuit must publish a notice of pendency of the lawsuit in a widely circulated business-oriented news publication. Other investors have 60 days from the date of the first-published notice to seek the court's permission to serve as lead plaintiff. Hach Rose Schirripa & Cheverie monitors these notices for recently filed cases in which its clients are eligible to participate and notifies them when such a case is filed.
What is a derivative or corporate governance action?
Derivative actions are lawsuits filed by shareholders on behalf of the corporation. Derivative actions are brought when a corporation possesses, but does not enforce, its rights against third parties, which may include management. It is often necessary for shareholders to institute a derivative action because the corporation will not bring a lawsuit against its officers and directors even where there is
serious wrongdoing – i.e., wasting of corporate assets, and breaches of fiduciary duties owed to shareholders by negligence, self-dealing or mismanagement. These types of actions seek a judgment requiring the third-party defendant to pay money to or make corporate governance changes for the benefit of the corporation. The restitution paid and corporate reform effected in turn maximizes
Will it cost us anything to file or participate in the litigation?
NO. There are no out-of-pocket costs to you to pursue these cases. HRS&C represents investors on a contingent-fee basis, regardless of the outcome. HRS&C will not be paid for their services unless and until there is a recovery. Only if we are successful in obtaining a recovery for the class, will HRS&C apply to the court for a percentage of the recovery obtained and for reimbursement from the recovery fund of the expenses incurred in the litigation.
investment managers, portfolio consultants and fund counsel, do we need Hach Rose
Schirripa & Cheverie, too?
YES. First, your investment managers and consultants do not monitor your funds for securities fraud. They are not paid to perform this service, nor are they equipped or qualified to do so. Second, although it is consistent with your fiduciary responsibility to identify your investment losses and their causes, it may be difficult for you to do that alone or with the assistance of your fund counsel. Only
attorneys who specialize in securities fraud class action litigation are qualified to perform this service. The attorneys at HRS&C have been recognized as leaders in representing the interests of Taft-Hartley pension funds in shareholder class action and complex class action litigation.