A securities fraud class action is a lawsuit in which a group of investors are claiming that they have lost money due to securities fraud, or some violation of federal and/or state securities laws and regulations. These types of lawsuits are generally brought against a company or corporation. The most common type of allegation in a securities fraud class action lawsuit is that the accused company engaged in misrepresentations as to its worth or business that caused inflated stock prices. This sort of allegation rests on the theory that if the investors had been made aware of the company's true value or business, then the investors never would have purchased so much of the company's stock, or paid such high prices for the stock in the first place. It is much more common for an investor to pursue a securities fraud claim through a class action lawsuit than through a private lawsuit.