Key Takeaways

• The client we are looking for: a person, trust, estate, retirement plan, partnership or business that lost $100,000 or more in one stock, or a current or former employee with firsthand knowledge of what the company hid.
• The case we are looking for: a company listed on the New York Stock Exchange or NASDAQ, a specific statement that proved untrue, and a stock that fell 10 percent or more in a day or two after one disclosure.
• The strongest cases involve health care, drug and medical device companies, and companies that went public in the last 12 months.
• If your loss is under $100,000, you are usually protected as a member of the class and do not need your own lawyer.
• Timing: once a case is filed, the request to lead it is due 60 days after the published notice. Email us when the stock falls.

What Kind of Securities Fraud Case Is the Firm Looking For?

We are looking for stock drop cases against companies listed on the New York Stock Exchange or NASDAQ. A stock drop case is a claim under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 that a company told investors something untrue and the stock fell when the truth came out. The strongest cases have these six facts:

1. A specific statement that turned out to be untrue. A forecast, a description of demand, a claim about safety or quality, or a number in a financial report. General optimism is not enough, and bad results alone are not fraud.
2. One clear disclosure and a sharp drop. The stock fell 10 percent or more in a day or two, right after the news. At a very large company a smaller drop can still mean billions of dollars in investor losses.
3. Proof that insiders knew. Internal warnings, a regulator’s findings, heavy stock sales by executives before the news, a sudden departure of the chief executive or chief financial officer, or employees who saw the problem firsthand.
4. A company whose statements can be checked. Health care companies and drug and medical device makers speak to investors about trial results, patient safety and the FDA. Those statements can be tested against records that existed at the time.
5. A recent public offering. If you bought in an initial public offering or a later offering, Section 11 of the Securities Act of 1933 does not require proof that the company meant to mislead.
6. A company able to pay. Established listed companies generally carry insurance and have assets. A claim against a company that has collapsed may recover little.

Who Is the Client the Firm Is Looking For?

We are looking for four kinds of clients. The table shows what qualifies and what to tell us in your first email.

Client	What qualifies	What to tell us first
Investor with a large loss	A loss of $100,000 or more in one stock. You bought before the bad news and still held shares when it came out. Shares in an IRA or other retirement account count.	The company, the dates you bought and sold, the number of shares and your loss.
Trust, estate, retirement plan, partnership or business	A loss in one stock after the company released bad news. Trustees, executors and plan administrators are responsible for other people’s money, so we review these losses at any size.	Who holds the shares, your role, and the same trade details.
Buyer in an initial public offering	You bought in an initial public offering in the last 12 months and the price fell after the company’s first reports.	The date and price of your purchase and how you bought the shares.
Current or former employee	You know firsthand that what the company told investors was not true. Your own loss does not matter.	Your position, the dates you worked there and what you saw. Do not send company documents.

What Events Lead to These Cases?

Six kinds of events lead to most securities fraud cases:

• An earnings miss or a cut to guidance soon after the company said the business was on track.
• A failed drug trial or a problem with the FDA, such as a late-stage trial that misses its main goal, a delayed approval or launch, or a warning letter.
• A report by a short seller or a news organization saying the company inflated sales, cut corners on safety or patient care, or billed improperly.
• A large write-down of a business or an asset.
• The sudden departure of a chief executive or chief financial officer.
• A bad first report after an initial public offering or a spin-off.

What Does Not Fit?

• A loss under $100,000 with no inside knowledge. If a class action is filed and you bought during the class period, you are generally a member of the class without doing anything. Keep your trade confirmations and account statements, and file a claim if the case settles.
• A stock that fell with the whole market or its industry, with no bad news specific to the company.
• Shares bought after the bad news came out.
• A company that has gone out of business with no insurance or assets to pay a judgment.
• A loss in a mutual fund or exchange-traded fund. The fund is the purchaser of the stock, not you.
• A loss caused by your broker’s advice or trading. That is a different claim. See broker misconduct and FINRA arbitration.

What Should I Put in My First Email?

Send five facts to msiddons@siddonslaw.com:

1. The name of the company.
2. The dates you bought and sold.
3. The number of shares.
4. Your approximate loss.
5. Whether you work or have worked for the company, or bought your shares in its initial public offering.

Do not send documents through this website. We will reply with the list of documents we need.

How Fast Do I Need to Act?

Act when the stock falls. Under the Private Securities Litigation Reform Act of 1995, an investor who wants to lead a filed case must ask the court within 60 days after notice of the case is published, and that deadline is not extended. A securities fraud claim generally must be filed within two years after the facts are discovered and no later than five years after the violation. A claim over a false registration statement generally must be filed within one year of discovery and no later than three years after the offering.

What Can a Current or Former Employee Do?

An employee who knows the company misled investors can do two things. The first is to support the investors’ case with a firsthand account. The second is to report to the Securities and Exchange Commission. The SEC whistleblower program pays an award of 10 to 30 percent of the money collected when a report leads to sanctions of more than $1 million, and federal law protects employees from retaliation. Do not send us company documents or anything the company’s lawyers told you. Tell us in your own words what you saw. Read more about whistleblower claims.

Frequently Asked Questions

Does the firm represent investors who lost less than $100,000?

Usually not as individual clients. An investor with a smaller loss is generally protected as a member of the class if a case is filed, and does not need a separate lawyer. Keep your records and file a claim if the case settles. We do review smaller losses for trusts, estates, retirement plans and businesses, and for anyone with firsthand knowledge of what the company hid.

Why does the size of the loss matter?

The court generally appoints the investor with the largest loss to lead a securities class action. The lead plaintiff directs the case and chooses counsel with the court’s approval. A large loss also makes it practical to file your own case outside the class.

Which companies produce the strongest securities fraud cases?

Health care companies, drug and medical device makers, and companies that went public in the last 12 months. Their statements about trial results, patient safety, regulators and demand can be compared with facts that existed when the statements were made.

Do I have a case if my stock fell after a bad earnings report?

Maybe. Bad results alone are not fraud. The question is whether the company said something in the months before that it knew was not true, such as repeating a forecast it had reason to doubt. Email us the name of the stock and the date it fell.

I bought shares in an initial public offering and the price fell. Is that different?

Yes. If the offering papers left out or misstated an important fact, a buyer in the offering does not have to prove the company meant to mislead. The deadline is shorter: generally one year from discovery and no more than three years from the offering.

What does it cost to have my loss reviewed?

The first conversation is free. If we take your matter, the fee terms are put in writing before any work begins.

Where does the firm represent investors?

The Siddons Law Firm is in Media, Pennsylvania. Attorney Michael A. Siddons represents clients in Pennsylvania, New Jersey, New York, Maryland and Washington, D.C.

Tell Us About Your Loss

Email msiddons@siddonslaw.com with the name of the company, the dates you bought and sold, the number of shares and your approximate loss. We will reply with the list of documents we need and tell you which deadlines apply.