The damages paid to the plaintiffs and the class depends on a variety of factors, such as the size of the recovery, the ability of the defendants to pay, whether the defendants are insured, and the number of persons who submit claims against the fund for their pro rata interest in the action. Damages are a complex legal calculation that may or may not equal your loss. To establish damages in securities class actions, for example, lead counsel will hire experts to calculate the monetary amount that a company’s stock was artificially inflated during the class period. Essentially, the experts will attempt to determine at what price the company’s stock would have traded during the class period, absent the defendant’s wrongful conduct. Lead counsel hire experts for this calculation because there may have been other factors that caused the company’s stock price to decline other than the alleged fraud.
