Is Class Action Right for You?

Usually you'll know you're eligible for a class-action suit because your broker will send you an official claim form. But even if you don't get a form, there are a variety of sites, such as bigclassaction.com and claimscompensation.com, that enable you to fill out claim forms online. Remember to see if you owned the stock during the claim period to determine whether you're eligible to join.

The next step is to document your losses, getting paperwork for all the trades you made during the claim period and providing evidence to the claims administrator that you are eligible. This is typically the most time-consuming process in joining a class-action suit, but for people who keep good records or have a diligent broker, it should be a snap.

Once you've gathered this paperwork, you will have a good idea of recognized losses -- what you should hypothetically recover in a class-action suit. On the claim form, you'll see information on the settlement fund, which tells you how much money would potentially be doled out.

"If there's a case with a $100 million settlement fund to be distributed, but there's $1 billion in recognized losses, then most people will get back 10% of losses," said Brad Heffler, chief executive of Claims Compensation Bureau. "But sometimes there are other factors in the plan of allocation, like when you bought a stock, that can boost how much you get. Say you bought a stock right on the day a company disseminated false information. You could get 25%."

Unfortunately, it's impossible to figure out the exact plan of allocation, since the total amount of recognized losses that will be paid from the settlement fund won't be clear until after everyone has joined the suit. Heffler says it's safe to assume you'll recover between 5% and 20% of your recognized loss.