Cadden & Fuller LLP

A Client-Focused Approach to Business and Real Estate Law

California securities litigation and when it may be needed

On Behalf of | Jul 15, 2024 | Business Litigation |

Securities litigation in California addresses legal problems with trading stocks, bonds, and other financial products. If a company or individual lies or breaks the law with these trades, they might face legal action. 

Reasons for securities litigation

Securities lawsuits can happen in many circumstances. If a company hides important financial information or makes false statements about share prices, returns, revenue, or other data, it may face litigation. 

Shareholders might also sue a company if the stock price drops and stays low indefinitely because of poor management, fraud, or insider trading. 

Insider trading, where company employees or executives use secret information to trade stocks, can also lead to major penalties. 

These actions can result in serious consequences for the individuals and entities involved, including both civil and criminal penalties. Legal actions can be costly and damage the company’s reputation. 

Steps to take during securities litigation

If your company faces securities litigation, consider following these essential steps.

Collect all pertinent documents and evidence related to the case. This includes emails, financial records, and any other relevant information   

Ensure that your legal team has specific experience in handling securities litigation. Their expertise will be crucial in navigating the complexities of the case.

Maintain open communication with stakeholders, including shareholders and employees. This helps preserve their trust and keeps them informed about the situation.

Protecting your company’s interests

Securities litigation is often intricate and time-consuming. But with a clear understanding and strategic approach, you can safeguard your company’s interests. 

Focus on transparency and proactive communication with stakeholders to navigate securities litigation. Protect your company’s interests and reputation during challenging times.

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