Key Takeaways

• Every class member has the right to opt out and sue separately. If you do nothing, you are bound by whatever the class case produces.
• An individual action lets you control the claims, the timing and the settlement, and lets you add claims the class case does not include.
• A separate case generally makes sense only when the loss is large enough to justify it.
• Waiting for the class case to finish can cost you the right to sue. The outer time limits on securities claims keep running while the class action is pending.

What Opting Out Means

When a securities class action is certified or settled, class members receive a notice. The notice describes the case and gives a date by which you may exclude yourself. If you opt out by that date, you give up your share of the class recovery and keep your right to bring your own case. If you do not, you are bound by the result and release your claims, whether or not you ever file a claim form.

A direct action is the same kind of case filed without waiting for a class notice. Investors with significant losses often file directly once the facts are public.

Why Investors File Their Own Case

• Control. You decide which claims to bring, when to settle and for how much. In a class action, those decisions belong to the lead plaintiff and class counsel.
• Additional claims. An individual plaintiff can assert claims that are hard to bring for a class, including state-law fraud and negligent misrepresentation claims and claims that depend on what you personally read and relied on.
• Your own facts. If you bought outside the class period, met with management or bought in a private placement, a class case may not cover your loss at all.
• Negotiating position. A defendant deals with a plaintiff who has a large, well-documented loss differently from an anonymous class member.

The Risks

A separate action is not right for every investor. You, not a class, carry the case, and you will have to produce documents and give testimony about your investment decisions. The defendants will ask what you knew and why you bought. If the class case settles and your case does not succeed, you recover nothing. We weigh the size of your loss, the strength of the evidence and the cost of the case before recommending this course.

Deadlines That Do Not Wait for the Class Action

This is where investors lose their claims. The securities laws set two time limits: one that runs from when the fraud is discovered, and an outer limit that runs from the violation itself. A pending class action can pause the first. It does not pause the outer limit. The Supreme Court has held this for the three-year limit, and federal appeals courts have applied the same rule to the five-year limit. For claims over a false registration statement, the outer limit is three years from the offering. For securities fraud claims, it is five years from the violation.

Class actions often take longer than that. An investor who waits for the class notice before deciding may find that the time to file a separate case has already passed. If your loss is large, the decision should be made early.

What Our Firm Does

• Calculate your loss and compare what you could expect from the class with what a separate case could recover.
• Identify the claims available to you that the class case does not include.
• Track the opt-out date and the outer filing deadlines.
• File the opt-out and the individual complaint in the proper court.
• Handle the case through settlement or trial.

Who We Help

• Individuals and families with a substantial position in a single stock.
• Trusts, estates and family investment entities.
• Business owners and retirement plans.
• Investors who bought in a private placement or outside the class period.

Frequently Asked Questions

How large does my loss need to be?

There is no fixed number. The loss has to be large enough that a better result in your own case would outweigh the cost and the risk of bringing it. We will give you a straight answer once we have seen your trading records.

If I opt out, can I change my mind?

Generally not after the opt-out date has passed. Once you are excluded, you cannot share in the class recovery. That is why the comparison should be done before you decide.

I received a class notice. How long do I have?

The notice states the opt-out date. It is usually a matter of weeks. Email us as soon as you receive it and attach nothing yet. We will tell you what we need.

Can I file my own case before any class notice goes out?

Yes. You do not have to wait. Filing early is often the safer course because of the outer time limits described above.

Does a separate case mean a trial?

Not usually. Most individual securities actions, like most class actions, resolve by settlement. The difference is that you decide whether the terms are acceptable.

Decide Before the Deadline Decides for You

Email msiddons@siddonslaw.com with the name of the security, your purchase dates and your approximate loss. If you have received a class notice, tell us the opt-out date. We will reply with the list of documents we need.