Lawyers are preparing to form a group to assist individual investors who suffered huge losses stemming from allegations Livedoor Co. violated the securities law, sources said Saturday.
The lawyers will study what remedial measures should be taken, including an option for the investors to file a class action suit against former Livedoor President Takafumi Horie and other former executives to seek compensation for the stock losses, the sources said.
The group could be formed as early as this week.
Livedoor’s share prices have tumbled by more than 90 percent since prosecutors raided the Internet company Jan. 16 on suspicion of spreading false information about a corporate takeover by a subsidiary and inflating the unit’s earnings results.
The price briefly dropped to 55 yen, compared with its Jan. 16 closing price of 696 yen before the raid. On Friday, it closed at 87 yen.
The lawyers, who are well-versed in financial and consumer issues, have decided to work together to assist individuals holding Livedoor shares after offering telephone counseling to them late last month, the sources said.
Some investors told the lawyers they suffered losses worth several hundred million yen. The investors also said their losses were due to inaccurate information provided by Livedoor, and that they want to file a class action suit against the company.
Horie and three other former Livedoor executives were indicted Monday on charges of violating the Securities and Exchange Law in connection with the allegations involving the subsidiary, Livedoor Marketing Co.
The prosecutors are expected to serve them with fresh arrest warrants in the coming days on suspicion of falsifying the parent company’s financial figures.
The lawyers believe investors will be eligible to seek compensation for the stock losses if Horie and others are found guilty of falsifying Livedoor’s financial statements.
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