What is a shareholder class action?

A shareholder class action is a lawsuit that is usually brought against a company or its officers by someone who claims they have suffered losses due to wrongful or illegal business practices. This type of lawsuit can be brought in Washington under the Washington Business Corporation Act (WBCA). In a shareholder class action, shareholders represent the entire group of shareholders, not just themselves, which means the result of the lawsuit affects all the shareholders. A shareholder class action must meet certain criteria in order for it to be allowed. The shareholder must have the legal right to sue, the loss must be large enough to warrant a collective action, and the claim must involve a number of similar claims. If these criteria are met, then the shareholder class can be certified by the court. This certification means that all shareholders who joined the class will be represented in the lawsuit. The purpose of a shareholder class action is to seek financial compensation from the company for any damages or losses suffered by the shareholders. It also serves to deter corporations from engaging in fraudulent activities that harm their shareholders. Depending on the outcome of the lawsuit, the shareholders may also be granted additional rights, such as the right to vote on corporate matters. Once the case concludes, the court will issue a decision that states whether the company is liable for damages and how much compensation the shareholders will receive. If the court decides that the company is liable, then the shareholders who joined the class action will receive a portion of the settlement.

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What is a shareholder class action?

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