Oct. 11, 2005
A federal securities class action is a court action filed on behalf of a group of shareholders under Rule 23 of the Federal Rules of Civil Procedure. Instead of each shareholder bringing an individual lawsuit, one or more shareholders bring a class action for the entire class of shareholders. In a class action, shareholders who purchased or sold the company’s securities during a specific period of time, known as the class period, usually allege the company and its officers and directors violated the federal and state securities laws.
Although you may be part of the class, you don't have to join the class action. Instead, you can "opt out." If you opt out and still want to pursue an action, you may have to hire an attorney.