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 Massachusetts, securities litigation is governed by both federal and state laws. Federal laws such as the Securities Act of 1933 and the Securities Exchange Act of 1934 provide the basis for most securities litigation, addressing issues like misrepresentation, fraud, and insider trading in the context of the sale and purchase of securities. These laws allow investors to file lawsuits if they have been misled by false statements or omissions of material facts. The Massachusetts Uniform Securities Act also plays a role in regulating securities within the state, providing additional protections against fraud and giving the Massachusetts Securities Division the authority to enforce the act. Class action lawsuits are common in securities litigation, allowing a group of plaintiffs who have been similarly affected by the alleged misconduct to sue collectively. In such cases, the plaintiffs must meet certain requirements to be certified as a class, and they are represented by lead plaintiffs and their attorneys. The outcome of these cases can include financial restitution for the plaintiffs, as well as penalties or corrective measures imposed on the defendants.