How do I join a class action?

Wed, 12 Mar 2008 00:57:07 GMT

Generally, before a court certifies a class action, it must conclude that there are too many class members for them all to be named as parties in the lawsuit. Technically, class members do not "join" into the litigation, but decide to participate by not "optingout." It is only in rare instances when a suit is filed as an "optin" class action. In those rare instances, a claim form or request to join form may be necessary. Ordinarily, the notice issued to class members in the usual suit for compensatory damages will tell the class if they need to take any action to participate. In a suit for compensatory damages, any class member who does not "optout" may be bound by the results of the litigation if it proceeds as a class action. If a class member should determine, however, that he wants to participate in the suit as a named party, he may hire his own lawyer and seek to intervene (participate) in the lawsuit.

Are unfair deals with insiders or related companies considered fraud?

Wed, 12 Mar 2008 00:57:01 GMT

These deals may represent a type of improper conduct usually referred to as breach of fiduciary duty. Such wrongdoing includes waste of your company`s assets, unfair business transactions with insiders or related entities, agreeing to a sale of your company at a price that doesn`t reflect its true value, or any other act that improperly robs a company or its shareholders of value. In such cases, a suit can be brought on behalf of the company and/or its shareholders to recover damages, or to ensure that shareholders are treated fairly.

Can I be bound by a settlement or judgment of a class action?

Wed, 12 Mar 2008 00:57:05 GMT

Yes. If the constitutional and procedural protections required for fairness are met in the underlying action, all absent class members are bound to the judgment or settlement of the case. However, if the action is primarily for compensatory damages, absent class members are entitled to notice and an opportunity to "optout" (exclude themselves) from the proceedings. If a person optsout, he is not bound by any judgment or settlement of the class action. In the event a class action is for declaratory or injunctive relief, notice is not required to bind absent class members and the court may not allow you to optout.

Can consumers bring class actions relating to products or services?

Wed, 12 Mar 2008 00:55:03 GMT

Absolutely. There have been many successful class actions brought by consumers. Signs of consumer fraud include:

Misrepresentations regarding a product or a service.
Products or services that just don`t work as they should.
Hidden fees or charges, or unexpected billing surprises.
Products that wear out early.
Use of the product results in injury.

Do class actions produce substantial recoveries?

Wed, 12 Mar 2008 00:57:02 GMT

While the result obtained ultimately depends on the strength of the case, it is a myth that class actions do not produce substantial returns for claimants. For instance, settlements in In re American Continental/Lincoln Savings & Loan Securities Litigation yielded approximately $250 million, over eighty percent of total damages of $288 million. More recently, Waste Management, Inc. shareholders recovered $220 million, while Informix shareholders won a settlement in excess of $100 million. Strong cases can and do yield strong recoveries.

How are attorney`s fees paid in a class action?

Wed, 12 Mar 2008 00:57:00 GMT

Almost all class actions are brought on a contingent basis, which means that the attorneys only get paid out of any recovery amount they obtain. This system helps insure that many investors and consumers with small losses can easily afford to bring class actions to assert their rights.

How can I tell if I`ve been a victim of a stock fraud?

Wed, 12 Mar 2008 00:57:14 GMT

Every case is different but when a stock has dropped, your loss may be due to fraud when Company executives misrepresented facts relating to important aspects of the business, or held off revealing bad news that should have been disclosed earlier. The company or its accountants restate financial results to reflect the true state of the company`s financial affairs. The stock drops rapidly on a disclosure of wrongdoing by the company or its executives or employees. Before bad news is revealed, insiders engage in insider trading by selling their shares at inflated prices. Many other scenarios may be reflective of fraud. If you are unsure of your rights, you may wish to consult an attorney.

How is a class member informed of his or her rights?

Wed, 12 Mar 2008 00:56:56 GMT

If the court allows a case to proceed as a class action, the court authorizes a notice to be sent to class members informing them of their rights. The court will order the best and most practicable method of notice, which is often an advertisement in a newspaper, a firstclass mailing, or both. Recently, the court has also approved and encouraged the use of Internet web sites to serve as an additional means of dissemination of the notice information. Accordingly, a class member may search the Internet to find out about class action resolutions and related information. However, in order to best insure that you receive notice, you may register your claim with the plaintiffs' attorneys representing the class, who will send registered class members' individual communications regarding the lawsuit.

How many people are needed to bring a class action?

Wed, 12 Mar 2008 00:56:54 GMT

A single person who has been injured may bring a class action on behalf of everyone who has been harmed. It is common, however, after the action has been started for many other injured people to join the class suit. In some situations, there may be a minimum number of class members specified by law in order for the lawsuit to proceed as a class action.

I may have been defrauded. How long can I wait to file suit?

Wed, 12 Mar 2008 00:56:58 GMT

Time limits, known as statutes of limitation, vary depending on the type of claim involved and, sometimes, the state in which the plaintiff resides. If you think you have a claim, don`t wait to consult an attorneyyou may find yourself time barred.

If I have a claim, should I file my own lawsuit?

Wed, 12 Mar 2008 00:57:08 GMT

The answer depends on the nature of the suit and individual circumstances. Some class actions seek recovery for a large group of people; however, individual damages may be small. For instance, if a mortgage company was improperly charging interest, and as a result every class member paid $100 more than should have been charged, it may not be practical because of the cost of litigation to pursue such a case individually. On the other hand, if a person has substantial damages and a serious claim, a lawyer should be consulted to assist in making the decision. In cases where the damages involved do not amount to several thousand dollars, litigation involving complex issues, due to the cost involved, may result in no recovery after those expenses and costs are deducted.

What are my obligations as a member of a class action?

Wed, 12 Mar 2008 00:57:11 GMT

As a member of the class who did not petition the court to become a lead plaintiff (i.e. fill out a certification) you have no obligations. If the action is resolved in favor of the plaintiff class, members are sent a notice and a claim form that provides instructions on how to receive a share of the settlement or verdict. If you own the shares directly you can expect that this notice will be sent to you. If the shares are owned in street name, the notice will be sent to your broker who then has the responsibility to send it directly to you. If you filled out a certification or otherwise petitioned the court to be appointed as lead plaintiff you may have additional

What is a "class action" lawsuit?

Wed, 12 Mar 2008 00:56:48 GMT

A class action is a case brought against a company whose actions have damaged many people in a similar way. If the case results in a successful recovery, either through settlement or trial, all class members receive their portion of the amount paid by the wrongdoers.

What is a shareholder derivative action?

Wed, 12 Mar 2008 00:57:16 GMT

Shareholders have a limited right to participate in the governance of a corporation. Even if a shareholder believes that corporate management has abused its power or received illegal profits, the shareholder may not be permitted to sue in his own name due to the fact that the claim actually belongs to the corporation. In that instance, the shareholder may be able to sue the company's officers and directors in the name of the corporation. The lawsuit is called a "derivative" action because the shareholder is not suing the corporation in his own name, but rather he is bringing a claim on behalf of the corporation to recover damages suffered by the corporation. In a shareholder derivative suit, all shareholders benefit if a recovery is received by the corporation. Typically, the attorney who handled the case is compensated out of the corporation's recovery.

What is securities arbitration?

Wed, 12 Mar 2008 00:57:18 GMT

In 1987, the U.S. Supreme Court held that brokerage firms could enforce predispute arbitration clauses contained in their standard form customer agreements. Virtually all brokerage firms' customer agreement forms now contain arbitration clauses. As a result, most disputes between brokerage firms and customers are arbitrated. Arbitration is a private dispute resolution process in which three arbitrators are appointed to decide the merits of a case. One of the arbitrators is required to be associated, presently or formerly, with an NASD member. The purpose of having an "industry representative" on the panel is to assure that the panel will have the expertise and experience necessary to understand the transactions and practices involved in the case. The other two panel members are typically businesspersons, such as lawyers, accountants, investors or retired judges, who have an interest in securities or dispute resolution. In arbitration, the parties are typically represented by counsel and present evidence through testimony and documents like in a court proceeding. A significant except to mandatory arbitration exists for class action claims.

What legal remedies are available for successful class actions?

Wed, 12 Mar 2008 00:56:50 GMT

Most class actions are filed for compensatory (money) damages. Class actions may also be filed to resolve disputes over a "limited fund," where the money available is inadequate to fully compensate all class members. Occasionally, class actions are filed to seek a declaratory judgment. Finally, a class action may seek injunctive relief. For example, a class action may be filed to request the court order the police or authorities to discontinue an unconstitutional practice.

What types of lawsuits end up as class actions?

Wed, 12 Mar 2008 00:56:52 GMT

There are many types: shareholder class actions, consumer class actions, class actions for employment discrimination and the like. Any time large groups of people (or even small businesses) have been similarly injured by wrongdoing, a Class Action may be possible.

When am I entitled to bring my claim in federal or state court?

Wed, 12 Mar 2008 00:57:13 GMT

You are entitled to file your complaint in court unless you signed a written customer agreement that contains an arbitration clause. Because most brokerdealer firms require customers to sign account agreements that contain arbitration clauses, most securities disputes involving brokerdealer firms are resolved in arbitration.