Securities litigation refers to lawsuits filed by persons or entities who bought or sold publicly-traded securities (tradable financial assets such as stocks and bonds). These lawsuits are often filed as class actions, with one or a few plaintiffs purporting to represent all persons and entities who bought or sold a company’s stocks, bonds, or other securities during a certain time period (class period). Securities lawsuits are typically based on violations of the securities laws, and allege misleading statements or omissions of material facts.

In Arkansas, securities litigation is governed by both federal and state laws. At the federal level, the Securities Act of 1933 and the Securities Exchange Act of 1934 are the primary statutes that provide the basis for securities litigation. These laws are designed to protect investors by ensuring full disclosure and addressing fraud in the securities markets. Plaintiffs may allege that a company or its officers made false or misleading statements or failed to disclose important information, affecting the value of the securities. At the state level, the Arkansas Securities Act also provides a framework for regulating securities within the state and includes provisions for civil liability in cases of fraud or deceit in the sale or purchase of securities. Class action lawsuits are a common form of securities litigation, allowing a group of plaintiffs to sue on behalf of all investors who were similarly affected during a specified period. Attorneys representing the plaintiffs in these cases must demonstrate that the securities laws were violated and that the violations resulted in financial losses for the investors.