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If you’re a regular reader of our blogs, you’ll hopefully have gained a good understanding of how the filing of a securities class action lawsuit, once perceived as possible indication of poor management, is now regarded as completely the opposite and the mark of an organisation which is determined to leave no stone unturned in order to achieve the best result for its investors.
A pension fund is not only the holder of the carefully built-up savings of millions of workers; it’s the repository of their dreams for a happy and financially secure retirement. It’s a particularly exacting fiduciary responsibility, and part of that responsibility is to maximise the investments of clients to the greatest extent possible. Taking a proactive attitude over investments which have not provided income due to corporate mismanagement of any kind is an essential part of doing so.
Securities class actions are based on allegations by investors that they bought securities in a publicly-traded company at a price which was increased after misleading information was given to them by the company’s directors. This can include misrepresentation of ESG policies (one of the fastest-growing areas in this type of litigation), company maladministration and false advertising. If monies have been lost due to illegal business practices, it is incumbent on a pension fund manager to recover as much as possible as part of their stewardship responsibilities. Taking part in a securities class action has significant potential to recoup losses.
The financial fall-out from the recent pandemic exposed the fragility of some organisations, and some, finding themselves in challenging pecuniary circumstances, attempted to mitigate further losses by presenting a misleading picture of their financial health or growth and expansion plans. It also exposed companies’ lack of disaster preparedness, crisis management planning and commitment to stakeholder transparency, leaving them wide open to a securities class action.
Pension fund managers understand that investors expect them to be increasingly proactive, both in maximising investment and protecting current assets. This has the additional benefit of increasing clients’ trust in their management in an industry in which investors are typically taking a long term view as well as promoting client loyalty and building customer retention. A pension fund which takes its stewardship seriously and is seen to be taking the initiative to optimise returns on behalf of clients is going to be a more attractive proposition than one which is content to lose possibly millions of pounds without a fight.
The International Corporate Governance Network defines stewardship at company level as helping to ‘promote high standards of corporate governance which contributes to sustainable value creation, thereby increasing the long-term risk-adjusted rate of return to investors and their beneficiaries or clients.’ Pension funds and other asset management organisations which use the securities class action route to ensure responsible stewardship will be seen as a driving force for positive change.
Pension fund managers may have baulked in the past at what they saw as the possibility of years of legal wrangling, expense and complications for little redress; extensive research can be necessary to assess how value has been lost and why these decisions were taken. A direct correlation between the decisions and the decrease in share value must be proved. However, the substantial increase in the number of securities class actions undertaken by tenacious pension funds has created a road map and helped to demystify the process, leading to greater willingness to hold companies to account. In addition, roughly two thirds of securities class actions filed are settled prior to the expense of holding a full trial, which demonstrates their effectiveness in bringing issues to public notice.
Outsourcing securities class actions to expert teams with advanced technology, monitoring capabilities and global expertise has also greatly improved outcomes.
At Goal Group we work with prominent financial institutions and asset management organisations from all over the world, protecting investments and providing expert management of securities class actions. Our specialist team undertakes global research, analysis, processing, relationship management and settlement distribution reconciliation, and has participated in many successful claim filings. We work regularly with pension funds, as well as asset managers, hedge funds, investment banks, private banks and prime brokers; why not contact us and find out more about our services.
A class action is a lawsuit initiated by an individual or company on behalf of other individuals who have suffered the same harm or experienced similar financial loss. Class actions are powerful procedural tools to hold wrongdoers accountable for widespread damages caused to a group of victims, who individually may not have sufficient damages to support the cost of prosecuting on their own.
Typically, it can take from 18 months to three years to conclude, from filing to settlement and distribution. Not all class actions follow this timeframe, as much depends on the unique details of each case. Our client portal makes keeping up to date simple.
Class action notifications refer to notices sent from litigators to individuals, investors, banks, and companies to encourage participation in an ongoing class action case where compensation may be due. For many, keeping track of these opportunities can be overwhelming, which is why our alert notification system is valued by our clients, globally.
We are provided with a complex formula which is entered into our application to allow us to calculate the recognised loss. The formula takes many elements into consideration such as the holding period/class period, amount of shares, length of holdings and types of shares. When a client is on-boarded we request a specific set of data which then maps to the calculation in our technology and produces an estimate on the recognised loss based on a variety of specific criteria
Goal prides itself on its compelling and flexible pricing. So much so that it is one of the cornerstones of our business. Typically, Goal will charge a percentage per claim, which is purely contingent and paid upon receipt of the distribution. As the money is paid to Goal, we will usually deduct the percentage before paying the remainder to the client. The reason we offer proof of concepts is to enable us to be as competitive on pricing as possible. Our SaaS Accelerator application has an annual fixed price subscription available.
Fill out our enquiry form or call us today to find out if you or your client portfolio is eligible to participate. Our dedicated team are on the end of the phone, and with offices across EMEA, APAC and the Americas, we provide global coverage for securities class actions. Our powerful Traffic Light System can assist you by taking into consideration criteria clients have for participating and based on that and the case summaries we produce, we can provide a recommendation, graded as a traffic light.
If you want a Goal representative to contact you, please fill out the form and someone will be in touch shortly.
Goal Group Ltd
9 Perseverance Works
Kingsland Road
London
E2 8DD
United Kingdom
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