[Session Recap] How BlackRock Navigates Class Action Payments & Oversight
Learn how investors are navigating securities class action payment and oversight challenges.
In the U.S. and Canada alone, investors have recovered nearly $4 billion from securities class actions in 2025. However, the financial and fiduciary stakes of ensuring shareholders receive funds owed from settled cases are just as significant.
The full class action lifecycle can span five or more years, from the initial filing of the case to settlement negotiation, approval, claim filing and processing, and distribution of funds. Generally, much of the attention focuses on identifying new settlements and claims submission. But remittance of eligible recoveries, the so-called “last mile” of the class action process, has become critical for investment managers because it involves the allocation of their clients’ funds.
Even when class action claim filings survive the audit and deficiency process, remittance can create major operational friction for the teams tasked with ensuring that recoveries are paid out accurately and in a timely fashion. Lil Ancona, Managing Director at BlackRock, recently discussed some of these challenges at length during a fireside chat with FRT’s Mike Lange. Their conversation spanned several key topics, including:
- Custodial transitions creating gaps in historical trading data
- “Direct payment” recoveries that require additional remittance guardrails
- Tighter deadlines for allocating SEC Fair Funds to eligible account holders
- Achieving visibility into the status of filed claims and pending payments
A Unified Approach to Class Action Recovery
Take “direct payment” cases such as certain SEC Fair Funds, where recoveries must be sent directly to account holders. Without adequate notice of upcoming distributions, investors risk cash exception breaks, rejection of settlement instructions, and lost efficiency. Accounts that close during claims administration, which often takes around 500 days to complete, create another consideration when remitting recoveries to underlying clients.
For investment firms taking a legacy approach to class actions, these processes are often highly manual and time-intensive for internal operations teams, and they make it more difficult to maintain oversight into past and future recoveries. However, as Ms. Ancona explains during her session with FRT, BlackRock has been able to alleviate some of these internal challenges by establishing a unified class action program where relevant trading history is captured and tracked across custodians and data providers.
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