FREQUENTLY ASKED QUESTIONS

What Is a Class Action?

A class action is a lawsuit in which one person sues on behalf of himself or herself as well as everyone else who suffered the same kind of injury (the "class").

What Is a Securities Class Action?

A securities class action is a lawsuit brought on behalf of a group of investors who have suffered an economic loss in a particular stock or security as a result of fraudulent stock manipulation or other violations of securities laws. Such cases are brought by one or more investors on behalf of all others who have suffered financial losses as a result of purchasing shares in a company during the period of time the fraud or securities laws violations artificially inflated the value of the stock (known as the "class period").

What Is a Class Period?

In a securities class action, the "class period" is typically the time frame during which it is believed the alleged fraud or other securities law violations artificially inflated the price of the stock at issue in the case. Only those persons who purchased stock during this period are included in the class action lawsuit. The class period is initially determined by plaintiffs' counsel after extensive research and investigation. Sometimes the class period changes during the course of the litigation based on additional information uncovered during the discovery process.

What is a Lead Plaintiff?

A Lead Plaintiff is a representative person(s) or party appointed by the court, who stands in for and acts on behalf of the other class members in the litigation. To appoint a Lead Plaintiff, a court must determine that the proposed plaintiff's claims are typical of those of other class members, and that this plaintiff will adequately represent the interests of the class as a whole. Under certain circumstances, more than one class member may serve as Lead Plaintiff. The Lead Plaintiff has control over the course and direction the litigation will take.

When Can Someone Apply to Be Appointed as a Lead Plaintiff?

Anyone who is a member of the class can apply to be appointed as a Lead Plaintiff within sixty days after a notice of the first securities class action has been published.

What Happens If I Do Not Apply To Be Appointed as a Lead Plaintiff Within Sixty Days?

If you purchased your shares during the class period and sustained losses you are automatically part of the class action and are entitled to share in any judgment or settlement obtained on behalf of the class. The sixty day deadline applies only to those seeking to be Lead Plaintiff.

How Are Plaintiffs' Attorneys Paid in Class Action Cases?

The plaintiffs' attorneys are usually paid in accordance with an order from the court in which the case is pending, and only if the case is successful. The judge responsible for the class action reviews a submission made by the attorneys, called a "fee petition." This petition sets forth in detail the work the attorneys have done on behalf of the class. The court then enters an order establishing the amount of the judgment or settlement proceeds to be paid to the attorneys. The amount of the fees awarded is based upon a number of factors, including, among others, the quality of the work, the difficulty of the case, the nature of the result, the amount of time spent on the case, and the risks involved. Typically, courts award between 20% and 30% of the total settlement amount.

What Kind of Recovery Can I Expect?

Until the litigation is well under way it is impossible to determine what recovery, whether by settlement or following judgment at trial, might be possible. Many cases, however, do settle. Typically, a settlement consists of a payment of cash, stock, or a combination of both to a common fund to be distributed to the class in proportion to the amount each class member is determined to have lost. The maximum possible recovery, which is rarely attained, is the amount of loss attributable to the illegal conduct, less attorneys' fees and costs.

How Long Does a Securities Class Action Usually Take to Settle or Resolve?

The typical securities class action case takes approximately two to three years from the time the initial complaint is filed until a case concludes either with settlement funds distributed to stockholders, or by judgment or dismissal. This is only an estimate; some cases have taken longer, especially when there are appeals, while others have taken significantly less time to resolve.

Can I Sell My Investment in the Company Being Sued and Still Be a Class Member?

Yes. It is not necessary for you to retain ownership of the securities after the class period has expired to participate in the lawsuit.

Do I Need Proof of My Ownership of the Stock, and, If So, What Is the Best Form of that Proof?

Yes. While the best evidence of ownership are the confirmation slips received when you purchased the stock, you may also use your brokerage statements indicating when you bought the stock and at what price. You should be sure to keep these records in a safe place. You may need to submit them to the claims administrator after the case has been resolved. You will receive notification by mail when it is time to send in this documentation.

If More Than One Law Firm Filed a Lawsuit Related to the Same Underlying Securities Violations, Do I Need to Contact All of Them?

No. Where more than one case has been filed on behalf of a class, the cases will generally be consolidated by the courts. You should not retain multiple law firms to represent you for the same claim. You cannot improve the amount of any recovery by retaining more than one law firm.

How Do I Sign Up?

To join a securities class action as a proposed lead plaintiff you must complete and sign a certification form and return it to us by fax at 1-617-439-0134, or by mail to Shapiro Haber & Urmy LLP, 53 State Street, Boston, MA 02109. By sending us a signed certification form, you are retaining our firm to represent you in that capacity.

If you do not wish to be considered as a lead plaintiff but are a member of the proposed class, you may be added to our class member list by providing a name, mailing address, phone number, email address, number of shares purchased, and approximate purchase dates. However, this is not necessary for inclusion in lawsuit as you will be automatically included if you meet the criteria for class membership.