Why Would an Investor File a Class Action Lawsuit?

Have you purchased stock only to have its value diminish because of a false financial claim by the company? Did you know that there are instances when a class action lawsuit may prove to be beneficial for an investor? Photo of legal document

If you are a shareholder, you should understand that there might be losses associated with your investments. However, these losses should be organic—if the value of the stock or security goes down because a company gave you an erroneous picture of its current or past finances, business prospects, or expected financial results, you could potentially hold it, as well as its board of directors, liable.

You can do this through a class action lawsuit, in which you can file a claim on behalf of other investors who have also been affected. Through this type of lawsuit, you can obtain damages for a large class of people who may have suffered financial losses.

An Example of an Investor Class Action Lawsuit

A good example of a class action lawsuit involving investors is that of Pfizer Inc. Recently, investors claimed that the drug manufacturer misled them with its off-label marketing techniques.

The company was accused of “making false statements to shareholders about its off-label marketing of products, including Bextra and other drugs.” The lawsuit said the company made bogus statements about government investigations involving the drugs to the public, and that as a result, it paid $2.3 billion to settle claims with the U.S. Justice Department.

Investors claimed that because the company was not truthful, its stock was artificially inflated over a three-year period. Reuters reported that Pfizer has agreed to a $400 million settlement with investors to avert a trial, which will need to be approved by a judge later this month.

Invest in Legal Counsel If You Have a Securities or Stock Claim

As this case shows, lawsuits allow investors who have been affected by the carelessness of a business to receive compensation. People who invest money into a company deserve an accurate portrayal of its financial prospects. Deceit should not be tolerated, and companies that try to falsely portray their financial outlook must be held liable.

If you are an investor who has been affected by a security or stock in which you were given a false portrayal, Gary S. Graifman, Esq. of Kantrowitz, Goldhamer & Graifman, P.C. has been involved in prosecuting a number of national class action suits.

Kantrowitz, Goldhamer & Graifman, P.C. – Class Action Lawyers

Source: http://www.reuters.com/article/2015/01/27/pfizer-classaction-idUSL1N0V61YR20150127


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