Imagine you are an investor and you decide to file a lawsuit after a company that you invest in suffers a stock drop. When you get to the courthouse, you find that you are the first person to file a federal securities class action on these facts. However, because of the Private Securities Litigation Reform Act (PSLRA), the district court chooses another party to be “lead plaintiff” in the litigation. Under the control of that lead plaintiff, the court dismisses the case prior to class certification, and you want to appeal that decision. Do you have standing? Your name is in the case caption for the active complaint. You were, in fact, the very first plaintiff in this action. But you aren’t the lead plaintiff anymore.
Private Securities Litigation Reform Act
Ninth Circuit Affirms Shareholders Cannot Sue Corporate Officers for Forward-Looking Projections that Don’t Pan Out
By Kelly Curtis on
It is illegal under the Securities Exchange Act to make false or misleading statements to the investing public about material facts. At the same time, corporations and their officers must be able to make statements about the company’s future plans, projections, and aspirations without fear of opening themselves up to…
Home Depot Data Breach Derivative Suit Sent Home
By Om V. Alladi on
Judge Thomas W. Thrash Jr. of the U.S. District Court of Georgia permanently shelved a derivative suit brought by shareholders of Home Depot.
Home Depot is a multinational home improvement retailer. In September, 2014, Home Depot suffered a data breach that resulted in $192 million in net losses. This breach followed the widely publicized data breaches at several other major retailers and department stores.