Doing Fraud on Securities Fraud

Everything, I like to say, is securities fraud. If a public company does a bad thing, or a bad thing happens to it, some creative lawyer will be able to argue that the company’s disclosure was misleading and that it defrauded its investors. Specifically, if you bought the stock before the bad thing was disclosed, and then the stock price went down after the bad thing was disclosed, you have a securities fraud claim.

Bad things do happen, so there are lots of securities fraud class actions, lawsuits on behalf of everyone who bought or owned stock in Company X between Date Y and Date Z. And these cases often settle for millions of dollars, and then the lawyers send out notices to investors saying if you qualify — if you bought stock in Company X between Date Y and Date Z — you can send in a claim and you’ll get some of the settlement money. In our modern system of stock ownership, it shouldn’t be that hard to figure out who qualifies. But it can sometimes be a little complicated: