Class Action Litigation
Klayman & Toskes, P.A. can handle class action lawsuits. A class action lawsuit is an important tool which allows multiple plaintiffs to combine together, frequently against a large, well-capitalized corporate defendant. Securities class action lawsuits are filed when a group of investors known as a “class” suffer economic losses as the result of the same cause affecting the members of the class.
Klayman & Toskes, P.A. has experience in the pursuit of claims against Wall Street investment banks and brokerage firms which act as the selling agent or underwriter of these securities. In the pursuit of profits, Wall Street firms have created their own proprietary financial products to sell investors. The securities industry landscape has changed with the creation of financial products such as ETFs, alternative investments, private placements, principal protected notes, and managed futures funds. Investment losses in these proprietary investment products frequently lead to class actions and securities arbitration claims.
According to a NERA Economic Consulting Study published in January 2015, “Settlement amounts in 2014 plummeted. Measured by median amount, settlements have been the lowest in 10 years. Measured by average amount, settlements have dropped 38%-61%, depending on which types of class actions are considered.” According to the NERA report for year 2014 was 221 class action lawsuits were filed with the following composition by type of allegations made:
- Cases for Violations of SEC Rule 10b-5 (76%)
- Cases for Merger Objection Cases (18%)
- Remainder of Cases Mostly Breach of Fiduciary Duty (6%)
According to the NERA Economic Consulting study determined the federal class action lawsuits is categorized according to industry sectors as a percentage of new class action filings for the year 2014 as follows:
- Health Technology Services (24%)
- Finance (19%)
- Electronic Technology (13%)
- Commercial and Industrial Services (10%)
- Consumer (9%)
- Energy (7%)
- Producer Manufacturing (5%)
- Retail Trade (5%)
- Other (8%)
The NERA Economic Consulting study found that the amount of time spent for class action lawsuits to be resolved from the first complaint filing to final resolution during the period from January 2000 thru December 2010. The required amount of time spent to resolve the class action lawsuits are as follows:
- More than 4 years (16%)
- 3-4 years (15%)
- 2-3 years (21%)
- 1-2 years (25%)
- Less than 1 year (13%)
Klayman & Toskes, P.A. has the experience needed to advise clients about the options available and whether to participate in a class action or opt out of the class action and pursue an individual securities arbitration claim for damages. There are advantages to both options however, depending on your personal case facts, careful review is required to advise our clients regarding which path would result in the most favorable outcome.