Posts Tagged ‘investor’

According to Deborah Mao in this article published today on businessweek.com, regulators for the city of Hong Kong has proposed new legislation that would permit representative actions for certain consumer class actions.  The legislation is reportedly a response, at least in part, to concerns about the difficulty of shareholders to seek collective redress for alleged acts of securities fraud, although the new law would not initial apply to securities fraud claims. 

The legislation would likely provide for class actions to be financed through a public legal aid program rather than through contingency fees, as is typically the case in the United States.  The proposal is still in the early stages, and specific legislation remains to be “drafted and introduced,” according to an official quoted in the article.

We’ll keep an eye on future developments relating to the proposed legislation.  Stay tuned…

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An article published Tuesday by John D’Antona Jr. at Trader’s Magazine Online News entitled Getting a Piece of the Class Action Pie discusses a creative new idea for making a buck on class action settlements.  The article discusses a service offered by a New Jersey financial technology company called LiquidClaims, Inc.  According to the article, LiquidClaims has an algorithm that matches up investors with securities class action settlements, and automatically files a claim for settlement benefits on behalf of any of its clients who are class members, taking 30% of any recovery as its fee.

As far as I know, there is no common label for this type of service, but for lack of a better phrase, I’ll call LiquidClaims a “class action settlement aggregator,” since its service is essentially to aggregate settlement claims in order to create economies of scale for its clients in claiming class action settlement funds.  According to its website, LiquidClaims calls itself “the leader in settlement claims optimization.” 

So far, it appears that class action settlement aggregator phenomenon is limited to the securities area, but given American ingenuity, one would think that the business model will catch on in other areas as well.  We’ll keep our eyes peeled for future developments.

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