About Securities Lawsuits

Securities class action lawsuits are typically filed against stockbrokers, companies, financial firms, investor companies, and financial advisors.  This particular type of class action happens when one of these entities commits violations of the Securities Exchange Act of 1934, but sometimes it’s just plain old illegal fraud.

Basically, there are laws governing the exchange of securities, or the sale of shares in other words.  Investors or potential investors have the right to be given accurate and up to date financial information about the securities they are about to purchase.  If the company misrepresents their financials, they can be sued in Federal court, usually in violation of the Securities Exchange Act of 1934.

Clients of financial companies can also sue then they feel that their holdings have lost money due to mishandling by the financial advisors or company.  When the broker or advisor or company fails to act on the shareholders’ behalf, a securities class action lawsuit is often pursued.  Even when a company doesn’t properly mange employee benefits to the best advantage of the employees, a securities class action lawsuit can be filed.