FRT’s Fast Five: Week Ending October 18, 2019

Financial Recovery Technologies Fast Five provides you with the top news in shareholder class actions. Stay up-to-date on the latest developments in settled (U.S./Canada) claims filing opportunities, Antitrust settlements, Global Group Litigation matters and more. For more information, contact your Financial Recovery Technologies representative or email us.

1. Banks Must Face Bond Price-Fixing Suit Post-Deutsche Deal

A New York federal judge ruled Tuesday that banks he’d previously dismissed from a bond price-fixing lawsuit cannot escape claims again in light of information investors gleaned from a settlement with Deutsche Bank. U. S. District Judge Jed Rakoff said new chatroom excerpts contained in the investors’ third amended complaint finally ties banking behemoths like Barclays Capital Inc. and Credit Suisse Securities LLC to an alleged conspiracy among securities units of the world’s largest financial institutions to fix bond prices for government-sponsored entities. The case is In re: GSE Bonds Antitrust Litigation, case number 1:19-cv-01704, in the U.S. District Court for the Southern District of New York. Click here to read the full article (subscription may be needed).

2. N.Y. Climate Case Against Exxon on Track for Trial After Hearing

A lawsuit accusing Exxon Mobil Corp. of defrauding investors on the risks the company faces from climate change is set for a courtroom showdown, as scheduled, after a judge, Oct. 16 tossed a set of pretrial motions from both sides. After a 30-minute hearing, Justice Barry Ostrager of the New York Supreme Court for the County of New York denied Exxon lawyers’ challenges to an expert and a witness the state plans to call for a trial. Click here to read the full article (subscription may be needed).

3. Defending Against U.S. Trading-Related Investigations and Litigation: Do the U.S. Securities and Commodities Laws Reach Foreign Conduct?

Two recent appellate court decisions shed light on the limited circumstances in which regulators and private plaintiffs can pursue claims for violations of the U.S. securities and commodities laws for conduct occurring outside the United States. Click here to read the full article.

4. Litigation Risk Spurs Firms’ Earnings Openness: Study

“The securities class action system is spinning out of control,” warns the U.S. Chamber of Commerce in a recent report ominously entitled “A Rising Threat.” Citing a more than 50% one-year increase in filings against companies in 2017 (to a level that was sustained in 2018), the Chamber complains that “the number of lawsuits is skyrocketing, and has reached levels not seen before the enactment of the Private Securities Litigation Reform Act.” Has the time arrived, as the Chamber and others contend, for major action to further limit securities litigation? Those who believe so will do well to consider research in the current issue of The Accounting Review. While by no means taking a stand on calls for action, the research offers what is arguably the most persuasive evidence to date on a persistent question highly relevant to that issue: Does the risk of shareholder securities litigation spur corporate disclosure and the benefits to investors that accrue from it, or does it inhibit disclosure? Click here to read the full article.

5. Litigation Abroad and Need Evidence in the United States? Second and Sixth Circuits Lend a Hand

Two very recent federal appellate decisions have substantially expanded the ability of foreign litigants to obtain evidence in the United States under 28 USC §1782(a) for use in their proceedings abroad. In Re Application of Del Valle Ruiz 2019 WL 4924395 (2d Cir. Oct. 7, 2019); In re Application to Take Discovery, 2019 WL 4509287 (6th Cir. Sept. 19, 2019). Click here to read the full article.

 

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Financial Recovery Technologies’ Shareholder Litigation Fast Five provides you with the top news in shareholder class actions. This is your exclusive summary of the latest industry developments related to settled, group and antitrust actions and recovery opportunities. Click here to subscribe.

Learn More

To learn more about how FRT can help your firm maximize recoveries in shareholder class action settlements, contact us at learnmore@frtservices.com.

About FRT

SETTLED CLAIMS  I  PASSIVE GROUP  I  ANTITRUST  I  FUTURE CLAIMS  I  OPT-IN MONITORING  I OPT-OUT MONITORING

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.

This communication and the content found by following any link herein are being provided to you by Financial Recovery Technologies (FRT) for informational purposes only and do not constitute advice. All material presented herein is believed to be reliable but FRT makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Opinions expressed in this communication may change without prior notice. Firms should always seek legal and financial advice specific to their unique situation and objectives.

Case Spotlight: American Realty Capital Properties, Inc. (ARCP)

COMPANYAmerican Realty Capital Properties, Inc. (ARCP)
SETTLEMENT AMOUNT$1,025,000,000 (tentative settlement)
INDUSTRYFinancial - Diversified
CLAIMSMisleading financials
RELEVANT PERIODFebruary 28, 2013 - October 29, 2014
CLAIM DEADLINEJanuary 23, 2020

The proposed settlement resolves claims that ARCP, now called VEREIT, misrepresented its financial performance for fiscal year 2013 and the first two quarters of 2014.

The settlement is noteworthy for its size.  According to Cornerstone Research,[1] since 1996, less than 2% of securities class action settlements have exceeded $1 billion.  If approved, ARCP will be the tenth largest since the PSLRA was passed.[2]

It’s also noteworthy for the amounts contributed by defendants other than the issuer.  ARCP is paying $738.5M.  The rest – $286.5M – is coming from AR Capital and others ($225M); ARCP’s ex-CFO ($12.5M); and ARCP’s auditors ($49M).

Finally, the settlement is noteworthy because post-class distribution, it will give a basis for comparing recovery rates to class members and opt-outs.  According to InvestmentNews,[3] last year the REIT paid $175 million to 9 institutional investors – including Vanguard – that had exited the class to pursue their own claims.

Something similar happened in last year’s mega-settlement with Petrobras ($3 billion, #5 on the top 10 list).  As here, the company there settled opt-out suits before resolving the class suit.  In both matters, the reduced class size likely enhanced the parties’ ability to reach resolution of the class action and given the outsized recovery, may well result in higher than average payouts to class members.

In any event, assuming the opt-out returns are significantly higher than class member recoveries, the ARCP settlement will further fuel the trend we’re seeing of large investors opting-out of high profile fraud matters.

CLASS DEFINITION

All persons and entities that purchased or otherwise acquired the common stock, preferred stock, or debt securities of American Realty Capital Properties, Inc. or ARC Properties Operating Partnership, LP during the period between February 28, 2013 and October 29, 2014.

IMPORTANT DATES AND DEADLINES

  • Final Approval Hearing; January 21, 2020
  • Deadline for Objecting to Settlement: December 31, 2019
  • Claim Filing Deadline: January 23, 2020
  • Exclusion Deadline: If you did not exclude yourself after the Notice of Pendency of Class Action, you are a Class Member and cannot exclude yourself at this point.

[1] Cornerstone Research, Securities Class Action Settlements, 2018 Review & Analysis.

[2] Securities Class Action Clearinghouse, Top Ten by Largest Settlement.

[3] Bruce Kelly, Settlements at old Schorsch REIT could cost shareholders $730 million (10/13/2018).

Subscribe to FRT’s Monthly Newsletter

Financial Recovery Technologies’ Shareholder Litigation Fast Five provides you with the top news in shareholder class actions. This is your exclusive summary of the latest industry developments related to settled, group and antitrust actions and recovery opportunities. Click here to subscribe.

Learn More

To learn more about how FRT can help your firm maximize recoveries in shareholder class action settlements, contact us at learnmore@frtservices.com.

About FRT

SETTLED CLAIMS  I  PASSIVE GROUP  I  ANTITRUST  I  FUTURE CLAIMS  I  OPT-IN MONITORING  I OPT-OUT MONITORING

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.

This communication and the content found by following any link herein are being provided to you by Financial Recovery Technologies (FRT) for informational purposes only and does not constitute advice. All material presented herein is believed to be reliable but FRT makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Opinions expressed in this communication may change without prior notice. Firms should always seek legal and financial advice specific to their unique situation and objectives.

FRT’s Fast Five: Week Ending October 11, 2019

Financial Recovery Technologies Fast Five provides you with the top news in shareholder class actions. Stay up-to-date on the latest developments in settled (U.S./Canada) claims filing opportunities, Antitrust settlements, Global Group Litigation matters and more. For more information, contact your Financial Recovery Technologies representative or email us.

1. Mutual Funds Should Consider Shareholder Litigation

A recent Law360 guest article published by two Ropes & Gray LLP attorneys that challenges a forthcoming law review article attempts to dissuade mutual funds from engaging in shareholder litigation. The challenge by Amy Roy and Robert Skinner purports to address the “practical realities of mutual funds acting as plaintiffs” while ignoring the practical realities of securities litigation. Indeed, under the right circumstances, it often makes sense for mutual funds to participate in securities litigation. Click here to read the full article (subscription may be needed).

2. Why Queensland Supreme Court Decision on Litigation Funding Is So Significant

A recent decision of the Supreme Court of Queensland has confirmed the legality of litigation funding for class actions in Queensland and brings Queensland in line with the class actions regimes in other Australian jurisdictions. The case of Murphy Operator & Ors v Gladstone Ports Corporation & Anor (No 4) [2019] QSC 228 saw a class action bought by a group of plaintiffs who ran commercial fishing operations and claimed to have suffered loss and damage as a result of dredging operations by the defendant, GPC, who managed the Port of Gladstone. In particular, the class action claimed that the dredged soil was not stored properly and the acidity of the exposed soil caused seafood species in waters proximate to the Gladstone Harbour to become depleted. The class action initially had some difficulties securing funding, but sometime after filing the proceeding, secured the assistance of litigation funder LCM. Click here to read the full article.

3. Southern District of New York Dismisses Federal Securities Claims Against Asset Management Company for Failure to Adequately Allege Reliance or Causation

On September 30, 2019, Judge Loretta A. Preska of the United States District Court for the Southern District of New York dismissed federal securities claims brought against a Japanese investment advisor and asset manager, its parent, and its former CEO. Plaintiffs, former senior executives of the Company or one of its subsidiaries, alleged that defendants engaged in a scheme to devalue plaintiffs’ stock acquisition rights (“SARs”) and to force them to sell their SARs back to the Company at the artificially deflated price, in violation of section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Court dismissed the Exchange Act claims finding that most plaintiffs failed to sufficiently allege a sale and that all plaintiffs failed to allege reliance or loss causation. Click here to read the full article.

4. Objector Drops Opposition To $300M Fee Award In Forex Case

Investors who have inked $2.3 billion in settlements with big banks over the alleged rigging of foreign exchange markets told a New York federal court Wednesday that the lone objector to a $300 million attorney’s fee award has agreed to drop his opposition. Click here to read the full article (subscription may be needed).

5. Conn. Fits Teva Stock-Drop Suit Better Than Pa., Judge Says

A proposed investor class action against Teva Pharmaceuticals will be moved from Pennsylvania to Connecticut, where it will join other investor suits over the drugmaker’s alleged price-fixing after a Philadelphia federal judge said the suit was not sufficiently tied to antitrust multidistrict litigation in his district. Click here to read the full article (subscription may be needed).

 

Subscribe to FRT’s Monthly Newsletter

Financial Recovery Technologies’ Shareholder Litigation Fast Five provides you with the top news in shareholder class actions. This is your exclusive summary of the latest industry developments related to settled, group and antitrust actions and recovery opportunities. Click here to subscribe.

Learn More

To learn more about how FRT can help your firm maximize recoveries in shareholder class action settlements, contact us at learnmore@frtservices.com.

About FRT

SETTLED CLAIMS  I  PASSIVE GROUP  I  ANTITRUST  I  FUTURE CLAIMS  I  OPT-IN MONITORING  I OPT-OUT MONITORING

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.

This communication and the content found by following any link herein are being provided to you by Financial Recovery Technologies (FRT) for informational purposes only and do not constitute advice. All material presented herein is believed to be reliable but FRT makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Opinions expressed in this communication may change without prior notice. Firms should always seek legal and financial advice specific to their unique situation and objectives.