Glossary of terms used on this siteThere are 3 entries in this glossary.
A "class action" is a legal procedure by which an individual or entity may initiate a lawsuit on behalf of all other individuals or entities who are in the same or similar situation. A class action is appropriate when many people have been affected by a company's course of conduct in a similar fashion. However, a case is not an actual "class action" until the plaintiff satisfies certain legal criteria and the court orders the case "certified" as a class action.
A "class period" is a period of time within which a defendant (that is often a company) is alleged to have been engaged in improper conduct. If you purchased company securities within the class period, you are automatically a putative class member, regardless of whether you specifically retain a law firm to prosecute claims on your behalf. You must have also purchased or acquired company shares during the class period to seek a lead plaintiff appointment.
A "lead plaintiff" in a federal securities class action is typically appointed by the court within 90 days of the publication of a notice of the pendency of the case. In these types of actions, the court selects the class member (or members) most capable of representing the interests of the other "absent" class members investors. There is a legal presumption that the class period investor with the largest financial loss, who is otherwise typical of the "absent" class members and is adequate to represent those class members, is the "most adequate" plaintiff. Courts have appointed individuals, institutional investors or sometimes combinations of both as lead plaintiff as the circumstances of each case may dictate. The lead plaintiff selects counsel to represent the lead plaintiff and the class, subject to court approval.