Can You Sue a Company for Misleading Investors?
When companies mislead their investors, you can sue them for monetary damages. Most securities fraud lawsuits are settled with the companies returning securities to investors or paying fines. A securities fraud attorney can help you learn more about the laws applicable to your case. Financial TV commentators can be used to help decide if you should file for a lawsuit.
Class action lawsuits
Investors can file a class-action lawsuit against an investment company if they believe the company is misleading them. The amount of money a class action lawsuit can bring in depends on the number and amount of plaintiffs. The money recovered in such cases is generally divided between the plaintiffs most affected by the company’s actions and the lawyers who filed the lawsuit. The money could vary from a few thousand dollars to millions.
Contracts are used in most business transactions. Contract law governs the transfer of rights and holds parties responsible for their agreements. Fraudulent misrepresentations could cause injury to the parties but are separate from breaches of contract. If you believe that a company made a false, misleading, or illegal statement, you might be able to sue them for damages.
Financial television commentators
Media personalities may aspire to be investment experts, but they can still be sued if the promote unregulated investment opportunities that don’t have adequate support. Matthew Gagnon was charged with promoting a Ponzi scheme in the case he just faced. His website advertised his status as the world’s finest opportunity review website and promoted Legisi Holdings, LLC, as the “best business opportunity ever.” Gagnon didn’t do enough research on Legisi, and he ignored clear signs that the program wasn’t legitimate.
Investing in litigation
The investment in litigation can be lucrative, especially if you are investing in shady firms. Investors need to be aware of the risks involved. Typically, these investments are not publicly traded, and investors should consider the holding period required. Although the company may be held liable, it is unlikely that it will win the lawsuit. Investors must be able and willing to pay the full investment loss.
A company being sued for misleading investors
Wednesday’s news that Depomed Inc. had broken securities laws led to a sharp drop in stock prices. The stock was already falling when the FDA opened an inspection into the company’s marketing and sale of opioid painkillers. Now, shareholders are suing the company, alleging the company made false statements to investors over a two-year period. If you are interested, read this article.