CLASS ACTION FAQ'S
General Class Action FAQ's
What is a class action?
What kinds of cases are litigated as class actions?
Should I, or do I need to be, involved in a class action, and is there risk
or expense for me?
How are attorneys paid in class action cases?
How does the court determine who will serve as Lead Plaintiff?
Securities Class Action FAQs
What is a Lead Plaintiff?
How does the court determine who will serve as Lead Plaintiff?
What is a securities class action?
What is a "class period" in a securities case and how is it determined?
What is the "Lead Plaintiff Deadline"?
I missed the sixty day Lead Plaintiff Deadline. What should I do?
How are the attorneys paid in securities class action cases?
What kind of recovery can I expect?
How long does a securities class action usually take to settle or resolve?
Can I sell my stock in the company being sued and still be a class member?
Do I need proof of my ownership of the stock, and what is the best form of
that proof?
If more than one law firm filed a lawsuit related to the same underlying
securities violations, do I need to contact all of them?
Will I be kept informed during the course of the litigation?
How can I discuss a potential class action or a pending case with an
attorney?
If I have information relative to a pending case, what should I do?
I am a small investor. What should I do?
Why should I choose Donovan Searles, LLC to represent me?
General Class Action FAQs
What is a class action?
A class action is a legal procedure used to prosecute efficiently a lawsuit
in
which a large number of people have been injured by a common act or set of
actions. The class process is used, for example, in cases alleging or
concerning price-fixing conspiracies (antitrust), fraudulent stock
manipulation (securities), and oil spills (mass tort). In a class case,
one or two named plaintiffs stand in for the entire group of similarly
aggrieved persons during the course of the litigation. When a class case
settles, the judge presiding over the case must approve the fairness and
adequacy of the settlement. Usually, potential class members have the
option, after receiving notice, of excluding themselves from a class or
class settlement, and pursuing the case on their own. The class procedure
allows individuals and small businesses to prosecute meritorious cases
that would have been too expensive and inefficient to litigate individually.
What kinds of cases are litigated as class actions?
The class action device has ancient roots. The Supreme Court has observed
that
class actions were used to resolve disputes among feudal tenants and manor
lords.
In addition, a form of the class action was typically used in disputes
involving
church parishioners and Indian tribes. More recently, class actions have
been
used in labor disputes, cases alleging consumer fraud, securities and
antitrust actions,
cases alleging human and civil rights violations, employee benefits
disputes, and environmental and mass torts. Donovan Searles, LLC has been
instrumental in the use and development of the class action device in
these areas as well.
Should I, or do I need to be, involved in a class action, and is there
risk or expense for me?
In most cases you need take no steps of your own to join a class action.
Indeed, usually only those who wish to exclude themselves from a class case
need do anything. By participating in a class case, you accomplish a number
of objectives. You may receive compensation for a wrong, injury, or
loss you have sustained — compensation that may not have been available
to you in any other forum. Through inclusion in a class of similarly
harmed persons, you also demonstrate to the court that the alleged harm
done was substantial and impacted a large number of people, increasing
both the likelihood of recovery and its size. Moreover, the only costs
to you will be drawn from any settlement or judgment proceeds upon
successful resolution of the case (though in few states, named
plaintiffs may be responsible for some costs). Class counsel work on a
contingency fee basis and only get paid upon successful resolution of
the matter. In addition, the attorneys advance expenses and costs
associated with prosecuting class cases.
How are attorneys paid in class action cases?
The attorneys are usually paid in accordance with an order from the
court before which the case is pending, and only if the case is
successful. The judge responsible for the class action reviews a
submission made by the attorneys, called a "fee petition." This
petition sets forth in detail the work the attorneys have done on
behalf of the class. The court then enters an order establishing
the amount of the judgment or settlement proceeds to be paid to the
attorneys. The amount of the fees awarded is based upon a number of
factors, including, among others, the quality of the work, the
difficulty of the case, the nature of the result, the amount of
time spent on the case, and the risks involved.
How does the court determine who will serve as Lead Plaintiff?
The Private Securities Litigation Reform Act of l995 provides that
the most adequate Lead Plaintiff is the person or group of persons
who, in the determination of the court, has the largest financial
interest in the relief sought by the class. The "largest financial
interest" can be determined by courts in a variety of ways. Some
courts appoint the Lead Plaintiff based on the dollar amount of the
loss due to the securities law violations alleged, and some base
this decision on the percentage of net worth lost. Also, depending
on the circumstances, several individuals may be appointed to serve
jointly as Lead Plaintiffs.
Securities Class Action FAQs
What is a Lead Plaintiff?
A Lead Plaintiff is a representative person(s) or party appointed by
the court, who stands in for and acts on behalf of the other class
members in the litigation. To appoint a Lead Plaintiff, a court must
determine that the proposed plaintiff's claims are typical of those
of other class members, and that this plaintiff will adequately
represent the interests of the class as a whole. Under certain
circumstances, more than one class member may serve as Lead Plaintiff.
The Lead Plaintiff has control over the course and direction the
litigation will take.
How does the court determine who will serve as Lead Plaintiff?
The Private Securities Litigation Reform Act of l995 provides that
the most adequate Lead Plaintiff is the person or group of persons
who, in the determination of the court, has the largest financial
interest in the relief sought by the class. The "largest financial
interest" can be determined by courts in a variety of ways. Some
courts appoint the Lead Plaintiff based on the dollar amount of the
loss due to the securities law violations alleged, and some base
this decision on the percentage of net worth lost. Also, depending
on the circumstances, several individuals may be appointed to serve
jointly as Lead Plaintiffs.
What is a securities class action?
A securities class action is a lawsuit brought on behalf of a group
of investors who have suffered an economic loss in a particular stock
or security as a result of fraudulent stock manipulation or other
violations of securities laws. Such cases are brought by one or more
investors in the stock, known as "Lead Plaintiffs," on behalf of all
others who have suffered financial losses as a result of purchasing
shares in a company during the period of time the fraud or securities
laws violations artificially inflated the value of the stock
(known as the "class period").
What is a "class period" in a securities case and how is it determined?
The "class period" is typically the time frame during which it
is believed the alleged fraud or other securities law violations
artificially inflated the price of the stock at issue in the case.
Only those persons who purchased stock during this period are
included in the class action suit. The class period is initially
determined by plaintiffs’ counsel after extensive research and
investigation. Sometimes the class period changes during the
course of the litigation based on additional information uncovered
during the discovery process.
What is the "Lead Plaintiff Deadline"?
The "Lead Plaintiff Deadline" is a sixty day period after a
securities class action has been filed within which applications
for Lead Plaintiff must be filed. If you wish to be a Lead
Plaintiff in a particular case, you must contact Donovan Searles, LLC
at least five business days in advance of this deadline.
I missed the sixty day Lead Plaintiff Deadline. What should I do?
If you purchased your shares during the class period and sustained
losses you are automatically part of the class action. The sixty
day deadline applies only to those seeking to be Lead Plaintiff.
How are the attorneys paid in securities class action cases?
The attorneys are usually paid in accordance with an order from
the court in which the case is pending, and only if the case is
successful. The judge responsible for the class action reviews a
submission made by the attorneys, called a "fee petition." This
petition sets forth in detail the work the attorneys have done on
behalf of the class. The court then enters an order establishing
the percentage of the settlement to be paid to the attorneys.
What kind of recovery can I expect?
Until the litigation is well under way it is impossible to determine
what recovery, whether by settlement or following judgment at trial,
might be possible. Many cases do settle, however. Typically a
settlement consists of a payment of cash, stock, or a combination of
both to a common fund to be distributed to the class in proportion
to the amount each class member is determined to have lost. The
maximum possible recovery, which is rarely attained, is the amount
of loss attributable to the illegal conduct, less attorneys fees and costs.
How long does a securities class action usually take to settle or resolve?
The typical securities class action case takes approximately
three to five years from the time the initial complaint is filed until a
case concludes either with settlement funds distributed to stockholders,
or by judgment or dismissal. This is only an estimate; some case have
taken longer, especially when there are appeals, while others have
taken significantly less time to resolve.
Can I sell my stock in the company being sued and still be a class member?
Yes. It is not necessary for you to retain ownership of the stock after
the class period has expired to participate in the lawsuit.
Do I need proof of my ownership of the stock, and what is the best form of
that proof?
Yes. While the best evidence of ownership are the confirmation slips
received when you purchased the stock, you may also use your brokerage
statements indicating when you bought the stock and at what price. You
should be sure to keep these records in a safe place. You may need to
submit them to the claims administrator after the case has been resolved.
You will receive notification by mail when it is time to send in this
documentation.
If more than one law firm filed a lawsuit related to the same underlying
securities violations, do I need to contact all of them?
No. Where more than one case has been filed on behalf of a class, the
cases will eventually be consolidated by the courts. You should not
retain multiple law firms to represent you for the same claim. You
cannot improve the amount of any recovery by retaining more than one
law firm.
Will I be kept informed during the course of the litigation?
You will be notified either by mail or email of any significant developments
during the course of the litigation.
How can I discuss a potential class action or a pending case with an
attorney?
If you wish to discuss your situation in complete confidence, simply
call 1-800-619-1677 during regular business hours and you will be connected
with an attorney who can help you. Donovan Searles, LLC attorneys will
discuss a pending case, or, if warranted, investigate a possible class
action
that has not yet been brought, free of charge.
If I have information relative to a pending case, what should I do?
If you believe that you have information relative to a pending case,
call 1-800-619-1677 to speak to an attorney in confidence.
I am a small investor. What should I do?
As a small investor your rights are as important as those of larger
investors.
Where your losses are a significant proportion of your net worth, it may be
Appropriate for you to seek lead plaintiff status. Therefore, you should
call 1-800-619-1677 to speak with an attorney.
Why should I choose Donovan Searles, LLC to represent me?
The law firm of Donovan Searles, LLC has extensive experience
representing plaintiffs in class action securities litigation and has
played a lead role in numerous cases, particularly those in which
hedge funds and other specialized institutions have had significant
investments. The expertise and experience of Donovan Searles, LLC
in successfully conducting securities and other complex litigation
has been recognized by courts throughout the
country.