Securities Class Action Lawsuits Rise in 2015
People who invest their money are rightly concerned about where their money goes. It may be no surprise to some that 2015 saw a rise in securities class action lawsuits. The number was higher than several previous years. A securities class action case is brought about when an investor suffers a loss due to a violation of securities laws. The cases often involve misinformation or significant facts being omitted to investors. When the truth is revealed, investors can bring a case against the company. They can seek to secure damages for the economic injury they suffered. Many people can gain large settlements as the result of their case.
Information from The D&O Diary revealed there were a record number of US class action suits last year. In particular, there was an increase in cases against IPO companies. During 2015, there were 186 securities lawsuits filed. The number is higher than any year since 2011. In 2014, there were only 170 suits filed, meaning an increase of 9% last year. The 186 cases were filed in federal court, and there were a further five in state court. Both of the figures together make the highest number since 2008.
Securities lawsuits are already off to a start in 2016. There are some notable names among those who have been hit with a class action lawsuit. For example, GoPro is one of the companies already facing a suit this year. In the second week of January, an investor alleged they covered up information about the company’s struggles. Joseph Bodri is saying that GoPro kept quiet about their underperforming Hero4 Session camera. He also says that they mislead investors about the projections for the first quarter of this year. Another company that has been hit with class action lawsuits is healthcare leader Merck.
A number of law firms and attorneys specialize in securities class action cases. The specifics involved in these cases can be very complicated. Anyone not well-versed in both law and financial matters would need to secure a lawyer to file a case. Martin Chitwood is one of the USA’s leading experts in the field. He and his firm have extensive experience with securities class actions. He and other attorneys who work with this type of litigation have in-depth knowledge of a number of issues. They need to know about not just securities law, but the other factors surrounding a class action case.
According to D&O, the increase in securities class action lawsuits is due mainly to one thing. Increase activity from IPO companies has contributed greatly. There was an increase in IPO-related cases during 2015. They totaled 29 in state and federal courts. Of all the suits filed, they make up about 15% of securities class action cases during the year. In 2014, there were only 17, which was just 10% of the total for that year. The higher number of lawsuits against foreign companies can also be taken into account.
Perhaps 2016 will also see a higher number of class action lawsuits. If there are, expect to see them in the pharmaceutical and tech industries. These were the two that featured heavily last year.