Types Of Derivative Claims In Securities Law
In securities law, derivative claims serve as powerful tools to hold corporate insiders accountable when their actions harm the company and its shareholders. These legal actions allow shareholders to stand up for the corporation when those in control fail to act, potentially recovering damages and implementing important governance reforms.
Attorney Richard A. Maniskas established RM LAW with a commitment to protecting investor rights through sophisticated securities litigation. With more than 20 years of experience and a national focus on derivative claims, attorney Maniskas helps shareholders pursue justice when corporate misconduct threatens their investments.
Common Types Of Derivative Claims
Shareholders can pursue several distinct types of derivative claims depending on the nature of the corporate misconduct. These include:
Breach Of Fiduciary Duty
Breach of fiduciary duty claims arise when directors or officers fail to act in the best interest of the corporation and its shareholders. Corporate leaders have legal obligations of loyalty, care and good faith. When they make decisions motivated by self-interest, fail to exercise proper oversight or engage in corporate waste, shareholders may bring derivative actions to hold them accountable and recover damages for the company.
Insider Trading
Insider trading derivative claims target corporate insiders who misuse nonpublic information for personal gain in securities transactions. These claims seek to recover profits made or losses avoided through improper trading activities, returning these funds to the company treasury.
Securities Fraud
As a securities fraud lawyer, Attorney Maniskas regularly pursues derivative claims based on fraudulent activities that harm corporate value. These claims often involve false or misleading statements in financial reports, public disclosures or regulatory filings that artificially inflate stock prices. When the truth emerges and stock prices fall, derivative actions can recover damages for the company while implementing stronger compliance measures.
Misrepresentation
Misrepresentation claims focus on false statements or material omissions made by corporate leaders. When executives mischaracterize the company’s financial position, operations or prospects, causing the corporation to enter unfavorable transactions or face regulatory penalties, shareholders can bring derivative suits to recover resulting damages.
Corporate Waste
Claims for corporate waste target transactions where corporate assets are squandered without adequate consideration. Examples include excessive executive compensation packages, wasteful acquisitions or business decisions so irrational that they cannot be attributed to sound business judgment.
Consult With Our Securities Litigation Attorney
If you believe corporate misconduct has harmed your investment, consulting with an experienced securities litigation attorney is essential. Call 484-615-2007 or contact the firm through its website to schedule a consultation.