Each year, over 100 securities class action suits are filed in the United States resulting in billions of recoveries each year. Some of the largest settlements include Enron, Bank of America and AOL Time Warner. In most instances, institutional investors remain part of the class and passively file a claim, but in larger securities suits, plaintiffs are more likely to opt-out and take direct litigation to maximize their recoveries. The largest opt-out recovery in a securities case, as identified by Brian J. Shea in his William & Mary Business Law Review article,  totaled $764 million. The specific private litigation settlement by AOL Time Warner  represented 30.6% of the total class action settlement. While the risk for bringing direct litigation is higher, if successful, it is probable private actions will result in higher recoveries than the normal claim filing recovery process.

The opt-out action for fund managers might not be part of their fiduciary duties to their beneficiaries or may be incompatible with the firm depending on size, but it is another option that can result in higher recoveries. The opt-out process can be complex and requires substantial resources to explore all the opportunities while understanding how the current class action proceeding is progressing.

Read more about the opt-out process here.

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Founded in 2008, Financial Recovery Technologies (FRT) is the leading technology-based services firm that helps the investment community identify eligibility, file claims and collect funds made available in securities and other class action settlements. Offering the most comprehensive range of claim filing and monitoring services available, we provide best-in-class eligibility analysis, disbursement auditing and client reporting, and deliver the highest level of accuracy, accountability and transparency available. For more information, go to www.frtservices.com.

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