General

What is LexShares?

LexShares is an online marketplace that connects investors with plaintiffs. LexShares' financing model enables accredited investors to purchase shares of equity ownership in specific lawsuits. If the plaintiff prevails, investors are paid a portion of the proceeds from the settlement or court judgement.

On LexShares you can:
 

  • Browse specific case investment opportunities;
  • Transact entirely online, including electronic legal documentation and funds transfer;
  • ​Manage and track your investments easily through your investor dashboard and receive updates on litigation activity

What is litigation finance?

At its most basic level, litigation finance (also called litigation funding) is the practice where a third party unrelated to the lawsuit provides capital to a plaintiff involved in litigation in return for a portion of any financial recovery from the lawsuit. Learn more about litigation finance by visiting our litigation finance 101 section.

How do I get started on LexShares?

If you want to invest money, you can start here.

If you are an attorney or plaintiff, you can start here and complete a funding application.

Who is LexShares?

LexShares is a team of professionals, with experience in litigation, finance and technology. You can learn more about us here.

Is LexShares.com secure?

LexShares is committed to protecting the privacy and confidentiality of information. Please see our privacy policy and terms of use.

How does a case get posted on LexShares?

Plaintiffs or attorneys apply to have their case posted on LexShares by joining LexShares. LexShares' team of legal and securities professionals and broker dealer partner, WealthForge Securities, LLC, review the supporting case documents and determine if the case meets LexShares' posting criteria. The review may include an examination of the legal merits, interviews with the legal and management teams as well as background checks on the relevant parties. Applicants should be aware that LexShares only posts meritorious commercial legal claims represented by experienced counsel with a strong track record of success in the related legal area. The defendant's creditworthiness and cost of litigation are also factors considered when evaluating cases for posting on LexShares.

What types of cases are posted on LexShares?

LexShares posts meritorious commercial cases at all stages of litigation. Including:

  • Anti-Competitive Claims
  • Anti-Trust
  • Banking and Insurance Disputes
  • Business Torts
  • Construction and Real Estate Disputes
  • Contract Disputes
  • Conversion
  • Fraud
  • Industrial Products Liability
  • Intellectual Property
  • Judgments
  • Professional Negligence
  • Securities and Investment Fraud
  • Shareholder Suits
  • Trademark and Copyright Infringement
  • ​Whistleblower, Qui Tam
  ​LexShares does not post personal injury cases.

For Investors

How do I get started as an investor on LexShares?

To get started join and register as an investor. 

Who invests through LexShares?

LexShares investors include high net worth individuals and institutional investors including select family offices, hedge funds and asset managers.

Do I need to be verified as an accredited investor to invest through LexShares?

Yes, you must be verified as an accredited investor in order to invest in legal claims through LexShares. Interests are offered pursuant to Regulation D Rule 506(c) which requires issuers to take reasonable steps to verify that all investors are accredited.

What is the definition of an accredited investor?

An accredited investor is a term used by the U.S. Securities and Exchange Commission (SEC) under Rule 501 of Regulation D. In order to qualify as accredited, an investor must accomplish at least one of the following:

1) Earn an individual income of more than $200,000 per year, or a joint spousal income of more than $300,000 per year, in each of the last two years and expect to reasonably maintain the same level of income.

2) Have a net worth exceeding $1 million, either individually or jointly with his or her spouse.

3) Be a bank, insurance company, registered investment company, business development company, or small business investment company.

4) Be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.

5) Be a business in which all the equity owners are accredited investors.

6) Be an employee benefit plan, a trust, charitable organization, partnership, or company with total assets in excess of $5 million.
 

For more information please see: http://www.sec.gov/answers/accred.htm

How do I prove that I am an accredited investor?

You can upload one of the following items to the Accreditation tab on your Investor Profile:

  • Accreditation verification letter: Letter signed by a third party (CPA, attorney, investment advisor, broker/dealer) of your choosing, verifying your status as an Accredited Investor.
  • Income proof: Tax returns or W2s for the past two years.
  • Asset proof: Copy of recent account or brokerage statements showing the value of your account(s) to be in excess of $1 million and credit release form.
Please note verification of status as an Accredited Investor via an accreditation verification letter or asset proof remains valid for 3 months. Verification of status as an Accredited Investor via income proof remains valid until April 15th of the following year.

How long does my proof of status as an accredited investor remain valid?

Verification of status as an Accredited Investor via an accreditation verification letter or asset proof remains valid for 3 months. Verification of status as an Accredited Investor via income proof remains valid until April 15th of the following year.

How does the JOBS Act impact LexShares?

The interests offered for sale through LexShares rely upon an exemption under Rule 506(c) enabled by Title II of the JOBS Act which went effective on September 23, 2013.  This exemption permits an issuer to engage in general solicitation or general advertising of an offering and selling of securities pursuant to Rule 506, provided that (1) all purchasers of the securities are accredited investors and (2) the issuer takes reasonable steps to verify that such purchasers are accredited investors.

How does the investment process work?

  1. Browse case financing opportunities and use LexShares' case summaries and court documents to evaluate investments.
  2. Transact entirely online. Sign all legal and transaction documents online signifying your binding investment commitment.
  3. Funds will only be debited from your account (or wire transfer requested) once the investment target is met. Should the investment target not be met in the specified fundraising period, you will be notified and your binding investment commitment terminated.

When I invest on LexShares, what do I own?

Investment opportunities posted on LexShares are indirect investments in legal claims offered through single purpose pooled investment funds managed by LawShares LLC and sold through WealthForge Securities, LLC, a registered broker dealer and member FINRA / SIPC. When you invest you are purchasing shares of an LLC as a limited member. In turn, that LLC contracts directly with the plaintiff.

Are there fees for investors?

There are no upfront or management fees for investors on LexShares. LexShares takes a carried interest in each case successfully funded. Carried interest is the share of the profits of an investment paid to the investment manager. This means investors are only charged a fee if their investment is profitable. 

I finished joining as an investor but I still do not see any specific case investment opportunities. Why is this?

Some plaintiffs have chosen to qualify individual investors prior to providing case details. If you hover over the case cards on the cases page and click "request access" the plaintiff will be notified that you would like to view their case. You will then receive an email notification once the plaintiff has granted you access to view their case specific details. 

How do investors transfer funds to LexShares?

For each investment, investors are able to choose to fund their investment via ACH or wire transfer. Standard ACH transfer can be made from an investor’s bank account for amounts up to $100,000. Amounts larger than $100,000 are made using a wire transfer. For each investment opportunity there will be specific account numbers that we will provide to the investor so that funds are properly received.

How does a case get chosen to be posted on LexShares?

LexShares team of legal and investment professionals consider a number of factors when evaluating cases. These factors include:

  • Legal merits: Cases must have strong legal merits. Legal merits means a sound legal basis for the case and a clear understanding of the claim’s value. Estimated time to resolution is also taken into account.
  • Legal team: Plaintiffs must be represented by experienced counsel with a strong track record of success in the related legal area. Attorneys may be working on a contingency or hourly basis.
  • Defendant's creditworthiness: Defendants must be well-capitalized entities with an ability to pay any damages awarded as a result of litigation.
  • Cost of litigation: The expected costs of the claim must be foreseeable. An estimated budget is required from counsel to consider a case for posting on LexShares.

How is the offering size per case determined?

LexShares works with plaintiffs and their legal teams to determine the expected costs of litigation and the required amount of funding in order for the litigation to reach finality. LexShares typically posts offering sizes for up to 10% of a legal claim's estimated value.

How is the potential return profile of an investment determined?

Returns are determined on a case by case basis and are defined in the claim investment agreement.

Is there an investment minimum and maximum?

Yes. The minimum may vary from offering to offering, but can be as low as $2,500. The maximum investment is the lesser of the offering size remaining for investment or 5% of an investor's liquid net worth.  

What happens if an offering is oversubscribed?

Remaining capacity for investment is funded on a first-come, first-served basis. Once the offering target is reached, the offering is closed.

Are these investments risky?

Yes, investments in legal claims offered through LexShares are speculative and carry a high degree of risk. Investment opportunities posted on LexShares are “private placements” of securities that are not publicly traded, are subject to long holding period requirements, and are intended for investors who do not need a liquid investment. Investors must be able to afford the loss of their entire investment without a change to their lifestyle.

How will I be updated on the progress of a case I am invested in?

Once your investment closes you will have access to a timeline for the particular case you are invested in. This timeline is viewable through your investor dashboard and contains litigation activity related to the case in which you have invested. The timeline also links to actual courtroom documentation filed publicly.

Why do you need my social security number?

Investments on LexShares are offered through single purpose pooled investment funds. We are required to report income for these funds to the IRS and therefore need investors' social security number or tax identification number. Investors will typically receive a Form K-1 for each of their investments through LexShares by approximately mid-March of the following tax year.

Will my investments in lawsuits through LexShares be disclosed to the public?

No, your investments in legal claims through LexShares will not be disclosed to the public without your prior consent.

Can non U.S. based investors fund cases listed through LexShares?

Currently, LexShares only supports funding by U.S. based investors through our online platform. If you're a non U.S. based investor please contact us for further information on investing in legal claims through LexShares.

For Plaintiffs

How do I post my case on LexShares?

To post your case on LexShares you can start by joining here and completing a funding application.

What types of cases can be posted on LexShares?

LexShares posts meritorious commercial cases at all stages of litigation. Including:

  • Anti-Competitive Claims
  • Anti-Trust
  • Banking and Insurance Disputes
  • Business Torts
  • Construction and Real Estate Disputes
  • Contract Disputes
  • Conversion
  • Fraud
  • Industrial Products Liability
  • Intellectual Property
  • Judgments
  • Professional Negligence
  • Securities and Investment Fraud
  • Shareholder Suits
  • Trademark and Copyright Infringement
  • ​Whistleblower, Qui Tam
​LexShares does not post personal injury cases. 

How much does it cost to post my case on LexShares?

There is no cost to apply for funding and have your case posted on LexShares. Should your claim be accepted, posted to our platform and your target offering size is reached, LexShares receives a commission paid out of the proceeds raised, typically 10%. Investors bear the risk of loss. Investors are only paid if you win the case at trial or reach an out-of-court settlement with the defendant. If your claim is unsuccessful, you are not obligated to pay. Should you prevail in your case, the amount due to investors is defined in your claim investment agreement which is signed prior to the fundraising period beginning.

What can funding raised on LexShares be used for?

Funding on LexShares can be used for multiple purposes including:

  • Hourly legal fees
  • Expert witness fees
  • Court fees
  • Discovery costs
  • Working capital
  • Personal expenses

Are there cases that LexShares will not post?

Yes, LexShares only posts meritorious commercial cases with high quality counsel. We do not post personal injury claims.

How much can I raise for my case?

LexShares works with you and your legal team to determine the expected costs of litigation and the required amount of funding in order to reach finality. LexShares posts cases with a funding need of at least $100,000. 

Will information about my case remain confidential?

Throughout the application process all information provided to LexShares regarding your legal claim will be securely stored by LexShares and cannot be shared with anyone without your authorization. How LexShares processes your information is subject to our terms of use and privacy policy.

In order to allow LexShares’ investor community to make investment decisions, you will be required to share some information about your claim. Specific information regarding your legal claim is only available to registered investors, whose identities have been verified, and are logged into LexShares. The only information shared with investors is that which is publicly available or discoverable. You will also have the option to post your case on a "by request only" basis where investors will be required to request access from you prior to viewing your case specific details. You will be able to view how your case will appear on the platform prior to it being posted.

Do I get to choose who can invest in my case?

When applying for funding through LexShares you have two options for fundraising: 
 
  1. Standard: All investors who are registered on the LexShares platform, whose identities have been verified, and are logged in are able to view your case specific details and invest in your case.

  2. By request only: All investors who are registered on the LexShares platform, whose identities have been verified, and logged in are only able to view generic information regarding your case. The generic information will not provide the litigants names or any detailed information about the case. Investors interested in viewing the specific details and investing must be granted access by the plaintiff.
Should you choose the "by request only" option, in your LexShares dashboard, you will be able to approve or deny which investors are able to see your case specific details and invest. Your attorney will be able to view which investors have been granted access.

Does litigation funding affect attorney-client privilege or attorney work product?

Our involvement as passive investors in legal claims does not affect the attorney-client privilege or put attorney work product at risk.  We do not request access to attorney-client privileged documents and we are always careful not to risk waiver of work product privilege.  Recent court decisions have consistently upheld that attorney work product shared with third-party funders is protected and that attorney-client communications are covered by the “common-interest” doctrine.

Does LexShares receive any control over the litigation or settlement negotiations?

No, LexShares does not receive any rights to manage, interfere with, or influence the prosecution of the case. The settlement remains in the plaintiff's control. LexShares simply enables a corporate finance transaction connecting plaintiffs with capital. ​

How much involvement do investors have once the investment has been made?

Individual investors will not have direct involvement with you, however they will be able to view updates regarding your case through the LexShares platform.  Updates that LexShares provides to investors will be based on publicly available information and LexShares' team communication with you and your legal team.

In what stage of litigation are legal claims posted on LexShares?

LexShares posts meritorious commercial cases at all stages of litigation from pre-litigation to appeal. To apply for your case to be posted on LexShares you must already have retained counsel.

What criteria determines if my case will be be posted on LexShares?

A number of factors are considered when evaluating cases for posting on LexShares.

  • Legal merits: Cases must have strong legal merits. Legal merits means a sound basis for the case and a clear understanding of the claim’s value. Estimated time to resolution is also taken into account.​
  • Legal team: You must be represented by an experienced counsel with a strong track record of success in the related legal area. Your counsel may be working on a contingency or hourly basis.
  • Defendant's creditworthiness: Defendants must be well-capitalized entities with an ability to pay damages awarded as a result of litigation.
  • Costs of litigation: The expected costs of the claim must be foreseeable. An estimated budget is required from counsel to consider a case for posting on LexShares.

What information do I need to provide LexShares for my case to be posted?

We will complete our initial review from the information you provided regarding your case upon joining LexShares and filling out a funding application. Additional information and supporting documentation may be requested from you or your legal team. Only information which is publicly available or discoverable may be provided to LexShares.

What information do I need to provide to LexShares once the investment is made?

After the investment is made, LexShares' team will monitor the progress of the case and will communicate with you and your legal team on a regular basis. Per your claim funding agreement with LexShares you must report any material changes affecting the case.

I submitted a case, what happens next?

Your attorney will be notified that you have submitted your case and asked to sign up on the LexShares to ensure the accuracy of the information provided. LexShares' team will complete an initial review of your case and may contact you or your legal team should additional information be required. Legal claims are reviewed in the order they are received. 

Does my attorney need to agree to have my case posted on LexShares?

Yes, your attorney must agree to have your case posted on LexShares. Upon applying, your attorney will be notified of your application and asked to review it for its completeness and accuracy. We may also reach out to your attorney for additional information during the review process. Your attorney will need to sign the claim investment agreement prior to your case being posted on the LexShares platform.

How long will it take LexShares to review my case?

Cases are reviewed in the order they are received. If a legal claim is accepted for review, you or your legal team may be contacted for additional information. The speed of this process depends on the responsiveness of the parties during the review. If a claim meets LexShares' posting criteria, you will receive a term sheet and claim investment agreement. After the terms are accepted, a final review will be performed, lasting up to 4 weeks.

For Attorneys

How do I post a case on LexShares?

To post your case on LexShares you can start by joining here and completing a funding application.

What types of cases can be posted on LexShares?

LexShares posts meritorious commercial cases at all stages of litigation. Including:

  • Anti-Competitive Claims
  • Anti-Trust
  • Banking and Insurance Disputes
  • Business Torts
  • Construction and Real Estate Disputes
  • Contract Disputes
  • Conversion
  • Fraud
  • Industrial Products Liability
  • Intellectual Property
  • Judgments
  • Professional Negligence
  • Securities and Investment Fraud
  • Shareholder Suits
  • Trademark and Copyright Infringement
  • ​Whistleblower, Qui Tam
 
​LexShares does not post personal injury cases. 

What can funding raised on LexShares be used for?

Funding on LexShares can be used for multiple purposes including:
  • Hourly legal fees
  • Expert witness fees
  • Court fees
  • Discovery costs
  • Working capital
  • Personal expenses

How much funding can be raised for my client's case?

LexShares works with you and your client to determine the expected costs of litigation and the required amount of funding in order to reach finality. LexShares posts cases with a funding need of at least $100,000. 

Will information about my client's case remain confidential?

Throughout the application process all information provided to LexShares regarding your client's legal claim will be securely stored by LexShares and cannot be shared with anyone without your client's authorization. How LexShares processes your information is subject to our terms of use and privacy policy.

In order to allow LexShares’ investor community to make investment decisions, you will be required to share some information about your client's claim. Specific information regarding the legal claim is only available to registered investors, whose identities have been verified, and are logged into LexShares. The only information shared with investors is that which is publicly available or discoverable. Your will also have the option to post the case on a "by request only" basis where investors will be required to request access from you prior to viewing your case specific details. You will be able to view how your client's case will appear on the platform prior to it being posted.

Do I get to choose who can invest in my client's case?

When applying for funding through LexShares you have two options for fundraising:

  1. Standard: All investors who are registered on the LexShares platform, whose identities have been verified, and are logged in are able to view your case specific details and invest in your case.

  2. By request only: All investors who are registered on the LexShares platform, whose identities have been verified, and logged in are only able to view generic information regarding your case. The generic information will not provide the litigants names or any detailed information about the case. Investors interested in viewing the specific details and investing must be granted access by the plaintiff.

Should you choose the "by request only" option your client will be able to approve or deny which investors are able to see the case specific details and invest. In your attorney dashboard you will be able to view which investors have been granted access.

Does LexShares receive any control over the litigation or settlement negotiations?

No, LexShares does not receive any rights to manage, interfere with, or influence the prosecution of the case. The settlement remains in the plaintiff's control. LexShares simply enables a corporate finance transaction connecting plaintiffs with capital. 

Does litigation funding affect attorney-client privilege or attorney work product?

Our involvement as passive investors in legal claims does not affect the attorney-client privilege or put attorney work product at risk.  We do not request access to attorney-client privileged documents and we are always careful not to risk waiver of work product privilege.  Recent court decisions have consistently upheld that attorney work product shared with third-party funders is protected and that attorney-client communications are covered by the “common-interest” doctrine.

How much involvement do investors have once the investment has been made?

Individual investors will not have direct involvement with you, however they will be able to view updates regarding your case through the LexShares platform.  Updates that LexShares provides to investors will be based on publicly available information and LexShares' team communication with you and your legal team.

What criteria is required for my client's case to be posted on LexShares?

A number of factors are considered when evaluating cases for posting on LexShares.
  • Legal merits: Cases must have strong legal merits. Legal merits means a sound basis for the case and a clear understanding of the claim’s value. Estimated time to resolution is also taken into account.​
  • Legal team: You must display a strong track record of success in the related legal area. You may be working on a contingency or hourly basis.
  • Defendant's creditworthiness: Defendants must be well-capitalized entities with an ability to pay damages awarded as a result of litigation.
  • Costs of litigation: The expected costs of the claim must be foreseeable. An estimated budget is required from counsel to consider a case for posting on LexShares.

What information do I need to provide LexShares to for my client's case to be posted?

We will complete our initial review from the information you provided regarding your client's case upon joining LexShares. Additional information and supporting documentation may be requested from you or your legal team. Only information which is publicly available or discoverable may be provided to LexShares.

What information do I need to provide to LexShares once the investment is made?

After the investment is made, LexShares' team will monitor the progress of the case and will communicate with you, your legal team and your client on a regular basis. Per your client's claim funding agreement with LexShares you must report any material changes affecting the case.

I submitted a case, what happens next?

Your client will be notified that you have submitted their case and asked to sign up on the LexShares portal. LexShares' team will complete an initial review of the legal claim and may contact you should additional information be required. Legal claims are reviewed in the order they are received.

How long will it take LexShares to review my client's case?

Cases are reviewed in the order they are received. If a legal claim is accepted for review, you or your legal team may be contacted for additional information. The speed of this process depends on the responsiveness of the parties during the review. If a claim meets LexShares' posting criteria, you will receive a term sheet and claim investment agreement. After the terms are accepted, a final review will be performed, lasting up to 4 weeks.

Ask Us Directly
877-290-4443

General Inquiries
info@lexshares.com

Investor Relations
investors@lexshares.com