National Class Action Attorneys
Offering Representation for Securities and Consumer Fraud
KGG maintains an active class action litigation practice headed by firm partner, Gary S. Graifman. Gary is an accomplished class action lawyer for securities and consumer fraud, and he has spent decades working in this area. In addition to class action law, Gary heads up our legal team for commercial litigation and employment law.
The Basics About Class Action Lawsuits
Q. What is a Class Action?
A. A class action is a representative lawsuit in which one or many individuals who sustained damages in similar situations sue on behalf of themselves and all others who have been injured by the acts of the defendant(s) which are complained of in the suit. As a general rule, the key determining factor is that a common element (or elements) to the claim exist which outweigh the individual differences among class members.
The benefit of bringing a class action is that when damages suffered by one individual or a group are too small to sue individually, acting on behalf of all others similarly situated may allow them to sue for an aggregate amount which makes the suit financially practical.
Q. Do all potentially affected individuals have to join the class action lawsuit in order for it to be maintained?
A. No, all individuals who might qualify as class members do not have to be named as plaintiffs or agree to the class representatives acting on behalf of the class for the suit to commence. Once a class has been certified by the court any potential class members must be given notice of the pending suit, and be given the opportunity to either join the class action or decline to be included.
Q. How many people must initially join in order for a class action lawsuit to be filed?
A. A class action may be filed by even one person acting on behalf of the class members if that person’s claim is typical of other class members’ claims and he or she can adequately represent the class.
Q. How are the legal fees and expenses paid?
A. In a class action, the disbursements and expenses are typically advanced by counsel and the legal fees are paid on a contingency basis. Therefore, legal fees and expenses are only paid to counsel if counsel is successful in obtaining a judgment or settlement fund. Even then, the fees and reimbursement of expenses must be approved by the court before counsel is entitled to payment or reimbursement.
Q. What is a Class Action Lawsuit for Financial Fraud or Securities Fraud?
A. In certain cases where an investor has purchased a stock or other security and the stock or security value goes down because the company or its management have given a falsely positive picture of the company’s current or past finances, business prospects, expected business or financial results, the investor may have a claim against the company or its management. Because the loss to each investor may not be great enough to sue individually, one or more investors may bring a suit in which they represent the interests of all similar investors, and file it as a class action. In a class action, the investor bringing the suit acts as a representative for all similar investors. This is not limited only to purchasers of a stock or security.
For example, in certain instances, the purchaser of a stock, who purchased before negative information was released may bring a class action on behalf of himself and all similar sellers who have been injured by the company’s withholding of the material negative information. Typically, such a suit is filed against the company, members of its board of directors, senior officers and, possibly its accountants or auditors.
Also, a holder of stock may bring an action against the company’s board of directors if the board has engaged in some type of inappropriate waste or mismanagement of the company’s assets or some other breach of fiduciary duty.
The securities practice seeks to recover for investors sums which they have lost as a result of the loss of substantial value in their investments. These include:
- Investors whose stock in a particular company or fund has lost value because of fraud, misrepresentation or mismanagement;
- Limited partners whose partnership holdings have depreciated in value or who have not received the return promised;
- Shares of a company being acquired at great disadvantage to the shareholder.
Q. What is a security?
A. A security is any financial investment or stock instrument which is sold to the public in quantifiable units. Securities which are typically involved in the class actions brought by KGG are corporate common stocks, preferred stocks, warrants, bonds, partnership units and the like.
Q. What are some types of actions in which a Purchaser, Seller or Holder of a Security may consider bringing a class action?
A. Some of the types of situations in which an investor may be entitled to file a class action to recoup his losses and those of other class members are:
- You have purchased the stock of a company and the company has now restated its earnings for an accounting period which includes your purchase.
- You have purchased stock of a company and the company afterwards has released negative information which it should have revealed at the time you bought the stock.
- You have purchased stock of a company and negative news is revealed from some other source which the company itself should have revealed, but did not.
- You have purchased the stock of a company and it is revealed that the company’s management is engaged in some type of wrongful conduct, which has a negative effect on the stock price or on the company’s assets.
- You have sold the stock of a company and certain positive news is revealed after your sale which increases the value of the stock, and which should have been released before you sold the stock.
- You own the stock of a company and the company’s management proposes in a proxy statement to accept an offer to sell a large block of stock to a third party at a price less than what the actual value should be for such a sale.
- You own the stock of a company in which management is agreeing to a third party’s offer to buy a large amount of stock or to merge the company, and certain members of management have negotiated to get something of value which the other shareholders are not receiving.
There may be other instances which merit consideration of a class action lawsuit. If you have a stock in which the value of the stock has been drastically reduced, please contact our office to discuss the matter.
Q. How are the legal fees and expenses paid in securities class actions?
A. Kantrowitz Goldhamer & Graifman, P.C., specializes in bringing class actions on behalf of investors. Class actions we commence are brought on a contingency basis. Therefore, the firm only gets paid if and when a settlement fund is obtained or a judgment is collected. Even then, the Court must pass on and approve all legal fees and expense reimbursement paid to counsel in a class action.
Q. What is a Consumer Fraud Class Action Lawsuit?
A. When a consumer of a product or service has been defrauded by a misrepresentation that is uniformly given to other consumers about that product or service, then one defrauded consumer may commence an action on behalf of all other consumers who were subjected to the fraud. In such event, that consumer acts both on behalf of himself and as a representative for the class of similarly situated consumers.
Q. What are some types of actions in which a consumer might consider bringing a class action?
A. This type of case may arise if consumers of a particular bank or financial institution have been subjected to the same illegal or improper escrow procedures or to incorrect calculations as to the rate or method of paying interest.
Additionally, such a case might arise if consumers have purchased a product based upon a representation which turns out to be false. For example, if a juice company represents that the juice is made with 100% pure juice and this turns out to be false. Or if a product is guaranteed to be flame retardant and this turns out to be false.
The key factor is that there is some common element to the purchases, the procedure or the misrepresentations which outweigh the differences between the members of the class.
Q. How are the legal fees paid for consumer fraud class actions?
A. Kantrowitz, Goldhamer & Graifman bring such class actions on a contingency basis. Therefore, the firm only gets paid upon producing a successful result, out of the settlement fund or judgment collection. Such a fee is first passed upon by the Court which must approve all fees and expenses paid to counsel in a class action.
Q. What class action cases has the firm been involved in?
A. KGG has been involved in prosecuting a number of national class action lawsuits. This list of pending or settled cases should give you an idea of how dedicated our firm is to this area of practice. One of our most highly publicized cases was a consumer class action settlement with Daimler Chrysler.
How Can I Join a Class Action Lawsuit?
Contact the class action lawyers at KGG today if you would like us to use the same knowledge, skill and dedication in relation you your matter. Call us toll free at (800) 711-5258, send us an email or simply fill out the contact form on our website. Any messages left for us will be promptly returned, as we know your time is valuable.
Our serving locations include Rockland County, Bergen County and Orange County.