Securities Fraud Attorneys - Seeger Weiss Law Firm

The Securities Exchange Act of 1934 provided opportunity for victims of securities fraud to seek recovery of damages through private action in federal court. The 1934 Act protected investors with creation of the United States Securities and Exchange Commission (SEC) responsible for enforcing federal securities laws and regulating the securities industry. Section 10(b) and SEC Rule 10b-5 of the 1934 Act established guidelines for presenting securities fraud claims. Securities fraud attorneys have brought lawsuits throughout the years testing the elements of the 1934 Act’s Section 10(b) and Rule 10b-5’s guiding principles. The elements of Rule 10b-5 that securities fraud attorneys must adhere to and prove in the plaintiff’s case are:

1. The defendant made a “material misrepresentation or omission”;
2. The defendant intended to make material misrepresentation or omission, or acted recklessly making the misrepresentation or omission. The defendant’s actions can be described as “scienter” or with a “wrongful state of mind”;
3. The defendant’s material misrepresentation or omission was made “in connection with the purchase or sale of a security”;
4. The plaintiff relied upon material misrepresentation or omission rather than the integrity of the market;
5. The plaintiff suffered economic loss as a result of the fraud;
6. The plaintiff can prove “loss causation” meaning the defendant’s misrepresentation or omission caused the plaintiff economic loss.

Securities fraud attorneys typically file Rule 10b-5 claims in federal court. As a response, the defendant’s attorneys will file a motion to dismiss this case under Rule 12(b)(6) on the grounds that the facts are not sufficient to raise liability under Rule 10b-5. The plaintiff attorneys are entitled to the discovery process if the court rules that the complaint is sufficient to be considered a Rule 10b-5 claim. The discovery process opens the door for the plaintiff’s securities fraud attorneys to seek a class certification as a securities fraud class action lawsuit.

The costs for the defendant increase if the case is not dismissed as a Rule 10b-5 case. The Rule 10b-5 ruling opens the door for the plaintiff’s securities fraud attorneys to seek documents from the defendant and depose witnesses. If the case is then class certified and becomes a class action lawsuit, the costs for settlement by the defendant rise even more.

Even though the elements of successful securities fraud cases are well known and tested, securities fraud remains a significant problem in the United States. The Private Securities Litigation Reform Act (PSLRA) of 1995 did not help the effort by increasing the pleading requirements for acceptance under Rule 10b-5. Fortunately, when qualified attorneys meet the requirements set forth in PSLRA, defendants have a more difficult time avoiding settlement. Since 1995, corporate abuses by Enron and WorldCom have shown the prevalence of securities fraud. More recently, the Ponzi scheme abuses by financier Bernard Madoff show the continued need for litigation by successful securities fraud attorneys.

Seeger Weiss LLP’s securities fraud attorneys are aware of the elements necessary for successful cases including the pleading requirements set forth in the PSLRA. If you have been a victim of securities fraud, please contact Seeger Weiss LLP. Seeger Weiss LLP’s securities fraud attorneys will quickly contact you to discuss the issues related to your case.

Seeger Weiss LLP's law firm also handles cases involving drugs and toxic injury, personal injury, asbestos and mesothelioma, class actions, securities fraud, and commercial litigation. Seeger Weiss LLP has offices in New York, New Jersey, and Philadelphia. Seeger Weiss LLP is a nationally recognized preeminent law firm.