When is a securities class action filed against a company?

Securities class actions are typically brought when: (a) a publicly held company and its officers, directors, other employees, accountants or underwriters makes an untrue statement of a material fact or omits to state a material fact in a publicly disseminated communication such as a press release, newspaper article, analyst report, prospectus or proxy statement; and (b) as a result of the untrue statement or omission, the company's stock drops, injuring investors who purchased the stock during the class period.