The NAPPA Report Publishes Article on Monitoring Securities Class Action Claims by Blair Nicholas and Ian Berg

August 2008

In its August 2008 issue, The NAPPA Report featured an article written by BLB&G Partner Blair Nicholas and firm associate, Ian Berg, entitled, “The 7th Circuit Sends a Strong Message: Institutions Must Monitor Securities Class Action Claims,” which discusses the implications of a recent opinion issued by the 7th Circuit Court of Appeals regarding institutional investor fiduciary responsibilities in monitoring on-going securities litigation and claims recovery.

The article highlights the need for institutional investors to develop and implement comprehensive shareholder litigation and claims administration policies and procedures to preserve viable claims and recover assets lost as a result of securities fraud.  In Larson v. J.P. Morgan Chase & Co., the Court dismissed valuable claims asserted by a large pension fund.  The fund had moved to intervene at the settlement stage seeking reinstatement of claims previously dismissed in the litigation.  The court called the intervention “untimely,” given that the fund is a “sophisticated litigant with a large stake who had no good excuse for failing to seek intervention (or bring its own suit) years ago.”

Partly due to procedural deficiencies, an academic study found that less than 30 percent of institutions with recoverable losses file proof of claim forms necessary to collect their share of the settlement proceeds.  The article emphasizes that considering the large amount of funds that have been, and will be, recovered by institutional investors through securities class actions, it is critically important for institutions to develop and implement portfolio monitoring and claims administration policies and procedures.

Mr. Nicholas and Mr. Berg have successfully represented numerous institutional investors in high-profile actions involving federal and state securities laws, accountants' liability, and corporate governance matters.

Download: "The 7th Circuit Sends a Strong Message: Institutions Must Monitor Securities Class Action Claims" (PDF, 186.20 K)

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