A Brief Guide to Securities Class Actions – Corporate / Commercial Law



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United States: Summary Guide to Class Actions in Securities

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Judson Lobdell, lead author of the current Association of Corporate Counsel (ACC) guide to shareholder derivative litigation and one of the two lead authors of the current ACC guide to merger litigation , the most recent being “A Summary Guide to Securities Class Action Litigation,” a resource created for directors and officers of public companies.

“Class actions in securities are regularly brought against public companies following a decline in the price of their shares. Despite repeated attempts to bring them under control, these actions are more frequent than ever, bringing in billions of dollars in settlements each year and costing businesses hundreds of millions of dollars in insurance premiums and attorney fees.

In this guide, we describe the most common securities class actions: (1) those alleging fraud, which are brought under section 10 (b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and SEC Rule 10b-5; and (2) those alleging misrepresentation in registration statements and prospectuses brought under Sections 11 and 12 (2) of the Securities Act of 1933 (the “Securities Act”). We also identify the situations that give rise to the greatest legal risks and suggest ways to mitigate those risks. “

Read the summary guide.

Due to the general nature of this update, the information provided here may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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