What is Securities Litigation?
Securities litigation refers to legal action arising from disclosures of corporate wrongdoing (often ESG failings) which have an impact on the corporate’s share price and in turn lead to losses for both institutional and retail shareholders.
In securities litigation, groups of investors or shareholders first seek to collectively engage with a listed entity. If that fails, the shareholders may escalate matters and file legal proceedings against the corporations (and sometimes their directors and auditors) accused of failing to disclose information sooner in respect of ESG failings or disclosing such information that is incompatible with earlier statements. This form of collective redress typically seeks remedies for financial losses resulting from the alleged deceptive practices, material misstatements or omissions or other breaches of securities laws, but also aims to hold the corporate to account, encourage change and deter future misconduct.
The mechanism for pursuing a securities litigation can take the form of either an opt-out securities class action, such as in Australia, or an opt-in securities group action as is the case in the UK. Woodsford and its subsidiaries are at the forefront of identifying and funding such actions in opt-out jurisdictions whilst, in addition, organising investors on such actions in opt-in jurisdictions such as the UK.
Securities litigation serves to uphold the integrity and transparency of financial markets, ensuring that investors are protected from fraudulent or unfair practices. These escalated collective engagements can encompass a broad spectrum of issues such as accounting fraud, misrepresentation of financial information, insider trading, or inadequate disclosure of risks.
Securities litigation often involves complex financial instruments, intricate regulations, and substantial economic stakes. Funders and lawyers specializing in this field navigate intricate legal terrain to advocate for the rights of investors and the proper stewardship of listed entities.