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 Texas, securities litigation is governed by both federal securities laws and state statutes. Federal laws such as the Securities Act of 1933 and the Securities Exchange Act of 1934 provide the framework for securities regulation and enforcement, allowing investors to file lawsuits if they have been misled by companies in which they have invested. These laws aim to protect investors from fraudulent practices and ensure transparency in the securities market. Texas also has its own securities laws, known as the Texas Securities Act, which is enforced by the Texas State Securities Board. The Texas Securities Act regulates the sale of securities within the state and provides remedies for investors who have been harmed by violations of the Act, such as fraud or misrepresentation. Securities litigation in Texas can be filed as individual lawsuits or class actions, where a group of plaintiffs with similar claims against a company represent the interests of a larger group. These lawsuits typically allege that the company made false or misleading statements or failed to disclose important information, affecting the value of the securities purchased or sold by investors.
