For years, investors, including asset managers, insurance companies, mutual and pension funds, as well as other financial institutions around the world have relied almost exclusively on the U.S class action system for the recovery of losses from, investor fraud. They have done so by participating in passive class action settlements or through active opt-out litigation.
However, since the 2010 U.S. Supreme Court decision in Morrison v. National Australia Bank, which held that U.S. securities laws do not apply to securities traded on foreign stock exchanges, investors participating in capital markets outside of the U.S. must look for other avenues to recover their losses.
For over 15 years, DRRT has been advocating for institutional investors in loss recovery actions worldwide.
Recently, The D&O Diary posted a report published by Institutional Shareholder Services titled “The Top 25 Non-North American Settlements”. As part of this report, they included a table listing the largest non-North American settlements. Unfortunately, two of DRRT’s ground-breaking cases, Hypo Real Estate, which settled for $190,000,000, and Deutsche Telekom, which settled for $150,000,0000, were omitted from the report. As such, we are pleased to offer an update to the report issued.
DRRT cases highlighted
Australia has historically been a promising jurisdiction for investor actions, and while technically it is considered an opt-in jurisdiction, DRRT considers Australian actions as “passive filing” opportunities given the low risk and low threshold to participate in these actions.
After excluding Australian actions, it is clear to see DRRT’s leading role in securities litigation matters outside of the United States. The table below shows that DRRT has been part of and instrumental in 50% of the settlements by numbers and 76% of the settlements by value.
DRRT cases highlighted
While the Netherlands continues to be the most active jurisdiction in resolving investor securities actions, we have also noted an increase in German actions resolving in the past year with the Deutsche Telekom and Hypo Real Estate settlements. For effective global investor protection, relevant jurisdictions must be identified and constantly monitored, as each case requires an individual concept to allow for risk free litigation because of evolving financing models, risk assessment, claims in controversy, and statutory conduct rules. DRRT has experience pursuing loss recovery actions in a dozen countries across five continents and is constantly monitoring the international landscape to identify jurisdictions that are developing strong investor-protection laws and trustworthy institutions.
As more cases continue to settle, more investors and litigation funders have entered the market which, in turn, increases the potential loss recovery opportunities. However, it remains important to collaborate with trusted partners who can properly vet cases and pursue them to a successful resolution.
DRRT is committed to continue advocating for investors in securities actions worldwide and is grateful for the support and loyalty of the hundreds of institutional investors who have supported the firm’s endeavors.