Shareholders of LeapFrog Enterprises, Inc. (NYSE: LF) are experiencing a loss in over $100,000 due to the dishonest and misleading discrepancies and omissive statements. The discrepancies are in regard to the LeapTV video game system release, LeapFrog’s consumer numbers, and their own financial guidance to investors.
This action from LeapFrog Enterprises, Inc. (NYSE: LF) is a violation of the federal securities laws which, according the the United States Securities and Exchange Commission (U.S. SEC), say that it is a requirement that “investors receive financial and other significant information concerning securities being offered for public sale; and prohibit deceit, misrepresentations, and other fraud in the sale of securities.”
The U.S. SEC Securities Act was put in place in 1933 and has the primary purpose of protecting investors. It states that “investors who purchase securities and suffer losses have important recovery rights if they can prove that there was incomplete or inaccurate disclosure of important information.”
As stated above, LeapFrog Enterprises, Inc. (NYSE: LF) has reported false information regarding consumer numbers, product stock numbers, and demand numbers, causing shareholding to, unknowingly, buy additional shares under false pretenses. As a result, the numerous LeapFrog shareholders lost hundred of dollars in pursuit of the information presented by LeapFrog Enterprises, Inc. (NYSE: LF).
While the U.S. SEC Securities Act of 1933 is more targeted to the protection of investors, the U.S. SEC Securities Exchange Act of 1934 lists what is required and what is allowed by public companies and states that the Act “identifies and prohibits certain types of conduct in the markets and provides the Commission with disciplinary powers over regulated entities and persons associated with them.”
Due to the discrepancies of the statements by LeapFrog Enterprises, Inc. (NYSE: LF), the company must now face the federal securities law of the United States Securities and Exchange Commission (U.S. SEC). The disappointment of these shareholders runs exceedingly deep, which will likely cause a class action lawsuit to arise against LeapFrog Enterprises, Inc.
According to the Louisiana class action attorneys, Herman Herman & Katz, LLC, “A class action is a lawsuit where a large number of people who have suffered similar injuries join together to sue another entity, usually a large corporation.” Herman Herman & Katz, LLC continue to explain that “Class actions are typically large, complicated cases that have unique set of legal procedures that differ from individual cases.”
Only investors that were affected by the discrepancies of LeapFrog Enterprises, Inc. (NYSE: LF) between the dates of May 5, 2014 and January 22, 2015 are able to participate in the class action lawsuit as lead plaintiffs in the case and have until Tuesday, March 24, 2015 to submit applications to the Court for a lead plaintiff.
But, in order to be a lead plaintiff in the class action lawsuit against LeapFrog Enterprises, Inc. (NYSE: LF), investors that were affected by the discrepancies of LeapFrog Enterprises, Inc. (NYSE: LF) must meet the required qualifications as described in the Private Securities Litigation Reform Act of 1995, which generally states:
“Each plaintiff seeking to serve as a representative party on behalf of a class shall provide a sworn certification, which shall be personally signed by such plaintiff and filed with the complaint, that:
- States that the plaintiff has reviewed the complaint and authorized its filing;
- States that the plaintiff did not purchase the security that is the subject of the complaint at the direction of plaintiff’s counsel or in order to participate in any private action arising under this title;
- States that the plaintiff is willing to serve as a representative party on behalf of a class, including providing testimony at deposition and trial, if necessary;
- Sets forth all of the transactions of the plaintiff in the security that is the subject of the complaint during the class period specified in the complaint;
- Identifies any other action under this title, filed during the 3-year period preceding the date on which the certification is signed by the plaintiff, in which the plaintiff has sought to serve, or served, as a representative party on behalf of a class; and
- and states that the plaintiff will not accept any payment for serving as a representative party on behalf of a class beyond the plaintiff’s pro rata share of any recovery, except as ordered or approved by the court in accordance with paragraph.”
It is important for investors and companies to understand the federal securities laws of the United States for the benefit of providing opportunities to participate in exciting business endeavors. The federal securities laws of the United States are put in place to protect investors and companies from themselves each other.
Class action lawsuits, such as the LeapFrog Enterprises, Inc. (NYSE: LF) lawsuit, are easily avoided through thorough understanding of business principles and, most important of all, honesty and transparency.