"Securities Class Period Selection Deserves Greater Scrutiny" Law360
Law360 (October 24, 2019, 4:17 PM EDT) --
The class period interval in securities class actions that allege violations of the federal securities laws under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 is the second most fundamental determinant of the magnitude of potential aggregate — or classwide — damages.
Undoubtedly, the first is the number of shares of common stock sold by participants in the market in response to an alleged corrective disclosure that is alleged to be related to a specific misstatement or omission disseminated by directors and officers.
The length of the class period not only affects the magnitude of potential aggregate damages, but is also a key factor affecting the selection of the proposed lead plaintiff that may represent a purported class of defrauded shareholders.
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