Buying and selling stocks is a funny business. We all imagine the proverbial smoke-filled rooms where older men trade insider information on companies like baseball cards.
We fear that these folks know more than we do. We are afraid that they use closely-held to give them advantages over the rest of the great unwashed when buying stocks which will go up and selling those that are about to go down.
The problem is these rooms exist. But it’s not just old guys smoking cigars. The people using their insider status for personal gains are men and women of every age and from every walk of life.
They use cell phones and meet at the gym. But the result is the same – insiders traders benefit to the detriment of other shareholders.
What Prevents Insider Trading?
So what prevents this? Well, the investigators with the Securities and Exchange Commission are charged with the task of finding out the who, what when, where and why of insider trading to protect the integrity of the system. The results of these investigations include fines, suspensions and, potentially, jail time for the offenders.
But what about the other traders affected? Nobody is going to sue over a few dollars lost on a single trade or even set of trades. The offenders don’t have to compensate anyone affected by their behaviour.
Have You Been Affected by Insider Trading?
That is what a class action is all about: addressing illegal or unfair behavior that affects a number of people in exactly the same way.
A Court can look at an insider’s conduct, determine the amount of damages which resulted and order the relief necessary to make the other shareholders whole.
This kind of situation is what the procedural tool called a class action is designed to address.
Over the last 16 plus years, we have handled dozens of class actions involving situations just like those described above. If something like this has happened to you or someone you know, call us. We may be able to help.