Very different cases under one name
Investors in public companies who lost money after misleading statements usually look to securities class actions, which are governed by federal securities law and procedural rules that make them demanding to bring. Shareholders who believe directors or officers harmed the company itself, for example through self-dealing or a failure of oversight, generally bring a derivative suit on the corporation's behalf, and any recovery usually goes to the company. Owners of closely held companies more often bring direct claims against the controlling holders, such as breach of fiduciary duty, breach of a shareholders agreement, or a petition for dissolution or a buyout. These categories overlap at the edges, but they differ in who controls the case and who receives any money.
Proof of ownership and the paper behind it
Start with proof of what you own, such as account statements, stock certificates, or the company's own ledger. For a public company, the dates you bought and sold matter, as do the public statements you relied on. For a private company, the shareholders agreement, bylaws, financial statements, and communications with management form the core of the file. Shareholders often have a right to demand inspection of corporate books and records, and that can be a sensible step before any lawsuit. If you have received a notice about a pending class action or settlement, keep it, because it may set dates by which you need to file a claim, opt out, or object.
Early questions that set direction
Several questions come up in nearly every first meeting. Where is the company incorporated, since that state's law usually governs shareholder rights? Does the charter or a shareholders agreement name a required forum or arbitration? Did you hold the shares when the conduct occurred, which matters for derivative claims? And what do you actually want, whether money, a change in management, information, or a way out of the company? Time limits apply to all of these claims and differ by claim type, so it is wise not to wait. We will tell you which path fits your situation and which ones do not.
