Portfolio Monitoring Services
It Pays to be Monitored
Saxena White's Select Investor Monitoring Service (SIMS™) provides trustees and other fiduciaries with a comprehensive securities litigation monitoring system. Provided without charge to select institutional investors, this program provides coverage of each essential aspect of securities litigation, including newly filed and settled actions.
How Can SIMS™ Assist your Fund?
We provide the following services free of charge to our institutional clients:
- Monitor the fund's trading activity
- Alert the fund when it sustains a loss which may be attributable to securities fraud
- Work with the fund to design a securities litigation policy which is tailored to its needs
- Analyze the fund's losses in newly filed securities fraud cases
- Analyze newly filed securities cases to determine the merits of the case
- Prepare quarterly monitoring reports which list the fund's losses in newly filed and settled cases
- Prepare a recommendation for the fund as to whether it should seek to be appointed as a lead plaintiff or remain an absent class member
- Represent the fund as lead plaintiff in meritorious securities fraud cases as well as cases involving breaches of fiduciary duty and shareholder derivative actions
- Provide regular updates regarding the status of ongoing litigation and consult the fund on all strategic decisions
- Advise the fund of settlements and settlement deadlines in securities cases
- Advise the fund when to "opt out" of existing class actions and file an individual lawsuit
Our institutional clients depend on us to provide them with accurate and timely information on losses attributable to securities fraud. Our services are tailored to our clients' needs and are designed to assist them in fulfilling their duties as fiduciaries. We monitor clients' trading activity and cross-reference the trading to securities fraud cases.
Institutional Investors as Lead Plaintiffs
In 1995, a new law was passed called the Private Securities Litigation Reform Act ("PSLRA"). The purpose of this law was to put control of securities fraud litigation in the hands of institutional investors rather than individual investors. Independent research indicates that, when institutional investors act as lead plaintiffs, the settlements are significantly greater than when individual plaintiffs lead the case.
Why Become a Lead Plaintiff?
Institutional investors are the ideal lead plaintiff because they increase the credibility of the case, they can demand important corporate governance changes, and recoveries are maximized.
Not surprisingly, an increasing number of securities fraud cases are being led by institutional investors. While institutional investors now play an important role in effecting corporate governance changes and fighting fraud, it is important to carefully consider the implications of serving as a lead plaintiff. We advise our clients when to seek appointment as lead plaintiff and when to remain absent class members. In evaluating lead plaintiff opportunities for our clients, we consider the following factors:
- The size of the fund's loss
- The merits of the claim
- The jurisdiction in which the case is filed
- Whether it meets the fund's criteria for involvement as lead plaintiff
- How many times the fund has moved for appointment as lead plaintiff. This is a very important consideration because the PSLRA limits the number of times a plaintiff may serve as a lead plaintiff to five times in a three-year period. While this presumption can be waived, it is a factor which we consider in making recommendations to our clients.
We also regularly send "No Action Letters" to our clients, advising them why they should not seek to be appointed as lead plaintiff.
Lead Plaintiff Qualifications
Most institutional investors can qualify as lead plaintiffs, including state and municipal retirement systems, police & firefighters’ pension plans, Taft-Hartley funds, and private and foreign funds.
Every year, over 100 securities fraud class actions are filed, seeking to recover billions of dollars in damages. Many of these cases are led by municipal or state retirement systems. Our monitoring services are designed to assist public plan trustees fulfill their fiduciary duties. For example, in Florida, public plan trustees are governed by Part VII, Chapter 112, Florida Statutes, entitled, "The Florida Protection of Public Employees Retirement Benefits Act", which provides in part that retirement systems should be “managed, administered, operated and funded in such a manner as to maximize the protection of public employee retirement benefits.”
When advising our public plan clients in Florida on seeking lead plaintiff status, we carefully consider whether such involvement will maximize a plan’s assets, or whether it would be advisable for the fund to take a less active role. We work with our public fund clients nationwide to ensure that they are receiving the information they need to fulfill their fiduciary obligations under governing laws.
Did You File Your Proof of Claim?
Every year, millions of dollars go unrecovered by institutional investors who fail to file proof of claim forms in settled securities class actions. Recent studies have indicated that as many as two-thirds of institutional investors do not file claims in securities class action settlements, resulting in an estimated $1 billion in unclaimed settlement proceeds per year. The recent barrage of lawsuits against mutual funds for their alleged failure to file claims should serve as a real wake-up call to any institution that is still leaving settlement money on the table.
Saxena White provides its clients with quarterly reports which list all pertinent information on settled securities cases, and provides assistance in filing the claims.