What is a shareholder class action?

A shareholder class action is a type of lawsuit that is brought by a group of shareholders in a corporation. This type of lawsuit typically involves claims of corporate mismanagement, fraud, or other violations of law, and the shareholders are able to combine their resources in order to increase their chances of success. In California, a class action lawsuit can be brought by a group of shareholders if they meet certain criteria, such as having a certain number of shares of the company, and having suffered a similar financial or legal injury due to the actions of the company. When a shareholder class action is successful, the shareholders typically receive some form of compensation, such as a monetary settlement or a court-ordered remedy. The fund for this compensation is typically provided by the company that is accused of wrongdoing, although other sources may also be used. The settlement money is distributed to the shareholders based on the number of shares they own. Shareholder class actions are an important way to protect shareholders from wrongdoing by corporate executives and directors. They provide a way for shareholders, who often have limited resources, to have their voice heard and to seek justice for any harm they have suffered. As a result, these types of lawsuits can be an effective tool for ensuring that corporations are held accountable for their actions.

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What is a shareholder class action?

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