The majority of cases handled by Chitwood Harley Harnes LLP are securities fraud class actions filed on behalf of shareholders of publicly traded companies. In these actions, the firm represents investors, frequently institutional investors such as state, county or union pension funds, in lawsuits to recover monetary losses caused by fraudulent misrepresentations or omissions by a company, its officers and directors, and frequently its auditors, that artificially affect the price of the company’s stock.
Investors rely on information provided by corporate management in press releases, SEC filings and company conference calls when making decisions to invest in a particular company. A company's stock price is determined by such information, and when that information is revealed to be false or fraudulent, investors may suffer a monetary loss.
Cases to recover monies lost as a result of corporate fraud are often brought as class actions, with one or more persons or entities taking a leadership role (or serving as a “lead plaintiff”) on behalf of all similarly situated individuals. Congress, when enacting the Private Securities Litigation Reform Act (“PSLRA”) in 1995, determined that the person or entity with the largest losses is the most appropriate party to lead this type of litigation. As a result, there has been an increasing trend toward institutional investor leadership in securities fraud class actions. This trend has resulted in higher recoveries for all investors, and Chitwood is proud to represent a number of public and private funds in these cases.
Sometimes a fund has a loss so significant that it may choose to file an individual, or "opt-out", action against a company. In addition to serving as counsel for classes, Chitwood counsels and represents its clients with respect to “opt-out” actions filed by individual investment entities under state laws.
Chitwood served as co-lead counsel in both the BankAmerica securities litigation in the Eastern District of Missouri, which settled in a $490 million recovery for investors, and the Oxford Health Plans securities litigation in the Southern District of New York, which resulted in a $300 million recovery. At the time these cases were resolved, they were the second and fifth largest recoveries, respectively, since the enactment of the PSLRA.