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Class Action A suit brought by one or more members of a large group of persons on behalf of all members of the group. If the court permits the class action, all members must receive notice of the action and must be given an opportunity to exclude themselves. Members who do not exclude themselves are bound by the judgement, whether favorable or not. EXAMPLE: In accordance with securities law, a corporation files a registration statement with the Securities and Exchange Commission concerning a stock sale. After investors buy several millions shares of stock and few years pass, the corporation files bankruptcy. At that point, a few of the investors, on behalf of all investors of the corporation, file a class action lawsuit seeking to recover the money they originally paid for the stock. (source: BARRON'S LEGAL TERMS, 2nd Ed.; by Steven H. Gifis, page 75) |
This page compliments of Paolo Benoli and Hrvoje Latkovic
Created: Thursday, July 14, 1999. Last Updated: Thursday, July 14, 1999. |
