Book

A Summary Guide to Securities Class Action Litigation

17 Nov 2021

Judson Lobdell, the primary author of the Association of Corporate Counsel’s (ACC) current guide to stockholder derivative litigation and one of two primary authors of the ACC’s current guide to merger litigation, most recently authored “A Summary Guide to Securities Class Action Litigation,” a resource created for in-house counsel, directors, and officers of public companies.

“Securities class actions are routinely filed against public companies following a decline in their stock price. Despite repeated attempts to reign them in, these actions are more prevalent than ever, annually yielding billions of dollars in settlements and costing companies hundreds of millions of dollars in insurance premiums and attorneys’ fees.

In this guide, we describe the most common securities class actions: (1) those alleging fraud, which are brought under Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and SEC Rule 10b-5; and (2) those alleging misrepresentations in registration statements and prospectuses, brought under Sections 11 and 12(2) of the Securities Act of 1933 (the “Securities Act”). We also identify the situations that give rise to the greatest risks of being sued, and suggest ways to mitigate those risks.”

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