More Than Just Stock in Class Action Recoveries

There is a common misconception among institutional investors that only positions in common or preferred stocks are eligible to participate in securities class action settlements. In fact, class action litigation against an organization often takes into account all securities associated with that organization. In addition to common and preferred stock, derivatives, credit positions, debt positions, mutual funds, shorts, options, and index futures are all examples of securities that may be included in a securities class action settlement, and therefore, offer the opportunity for investors to recover funds.

As a result, pursuing securities class action recoveries presents an opportunity for all types of investors to their fair share of available settlement dollars. Based on data compiled by Financial Recovery Technologies (FRT), almost $20 billion has been disbursed in recent years involving more than 110 cases in which the associated securities ranged beyond common or preferred stock. FRT estimates that an additional $7 billion will be made available in the near future from settled cases involving less traditional security vehicles that have yet to be disbursed. In these cases, more than 20,000 different securities are applicable to the expected disbursements. Many additional cases that FRT is currently tracking have been filed with pending settlements. All told, the opportunity for securities class action recoveries for institutional investors that concentrate on credit, debt, and other classes of securities is unquestionably significant.

Our guidance to such firms is simple: do not assume that pursuing class action settlements is immaterial to your firm. By comparing your firm’s historical transactions against a proprietary database of cases and eligible security identifiers, FRT can provide you with a definitive assessment of the opportunity for your firm to claim funds that have been made available in class action settlements. Even if your organization does not concentrate on common or preferred stock, FRT can help you recover all of the securities class action settlement funds that you are entitled to receive.

Contact FRT today to learn more about how we can be of service to your organization.

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