Securities litigation can be complex for both investors affected by securities fraud and companies accused of securities fraud. Securities litigation can sometimes be class action in nature and can often involve substantial money and resources. The ability to properly investigate securities fraud claims and take the right approach is essential to successful securities litigation. Pursuing securities litigation may mean seeking the recovery of significant financial losses that were fraudulently suffered.
In general, securities fraud occurs when a false statement is made about a company or the value of its stock, causing investors or others to make important financial decisions based on the false information provided. Company executives who provide false or misleading financial statements or engage in insider trading can harm average investors.
There are generally three broad categories of securities fraud. The first type occurs when company executives fail to properly disclose accurate financial information through false or misleading financial statements. The second type occurs when an individual, such as an accountant, makes financial decisions based on information acquired because of the party's unique position. The final type of securities fraud occurs through third-party misrepresentation and what are called "pump and dump" schemes. All three types of securities fraud can cause significant harm to investors.
If you have been the victim of securities fraud, including financial misrepresentation, accounting fraud or insider trading, among other types of securities fraud, it is important to understand possible remedies, options and resources. If you are seeking more useful information on the topic, you may wish to explore our website further.