Valenti Hanley PLLC

Merger objections drive a huge increase in securities litigation

A lot of people are more concerned about private security than private securities. But more and more individuals and companies are looking to securities litigation as a good way to protect wealth and interests in the market.

  • Is securities litigation a big part of the practice of law?

Compared to torts or criminal cases, litigation surrounding securities sale or trade is relatively small. But it has been steadily growing. 2018 was the fourth consecutive year in which numbers of securities cases went up. Only in 2001, the height of the IPO laddering case boom, had more filings.

  • What has contributed to the increase?

Increased trade generally brings increased litigation, especially in cases when securities are traded between parties for the first time, and misunderstandings may abound. But recently, the upward trend in case filings has to do with merger-objection filings. In 2014, fewer than 20% of cases had to do with merger objections. In 2018, it was the most commonly filed type of case.

  • What is a merger-objection filing?

The thrust of a filing in this category is a charge that a merger or acquisition was conducted improperly, possibly because of a conflict of interest among company officers. These cases are normally filed by shareholders of companies that are being acquired.

  • How can people begin securities litigation?

A conversation with an attorney is a good first step. A lawyer can take a look at a specific case of company acquisition or other reason to file a securities case and advise clients on whether to proceed in court. Legal representation is also generally a plus when the case is heard.

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