Archive for November 17th, 2008

According to Sundeep Tucker of the Financial Times, a recent study by the Goal Group, a UK-based “class action services specialist,” found that Asian institutional investors were not taking advantage of settlement funds available in U.S. securities class action settlements.  The article points to a cultural aversion to “corporate confrontation” and perceptions about the complexity of the claims process as reasons why Asian investors have chosen not to participate.

Tucker quotes Steven Everard, managing director of Goal, as saying that an institutional investor has a “clear duty” to seek class action proceeds on behalf of its clients, suggesting that the failure to make a claim in a U.S. securities class action settlement could expose an Asian institutional investor to liability itself.

Especially with class action procedures expanding overseas, the prospect of fiduciary liability for an institutional investor raises the possibility, at least conceptually, of “nested” class actions, where a party is sued in a class action for breach of fiduciary duty for failing to make a claim for benefits in another class action.  (“Nested” class actions is not a term of art as far as I know.  In fact, I just made it up, but I expect credit if it catches on!).  I have not heard of such a thing happening, but it’s probably only a matter of time…

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