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 Wisconsin, 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 of fraud and misrepresentation in the sale of securities. These laws allow investors to file lawsuits if they have been misled by false or incomplete information when buying or selling securities. The Wisconsin Uniform Securities Law (Wis. Stat. §§ 551.101 to 551.802) also regulates securities within the state, providing additional grounds for litigation, such as the sale of unregistered securities or the operation by unlicensed brokers. Class action lawsuits are a common form of securities litigation, where a group of plaintiffs with a common claim against a company are represented collectively by a lead plaintiff or plaintiffs. These cases often involve allegations that a company made false statements or failed to disclose important information, impacting the value of its publicly traded securities. Attorneys representing the plaintiffs in these cases aim to recover losses on behalf of the entire class affected by the alleged misconduct during the specified class period.