According to Nera Economic Consulting, a total of 312 federal securities class actions were filed during the first three quarters of 2018, a near-record rate that points to a second consecutive year with more than 400 filings.
2018 settlement news was largely influenced by the $3 billion settlement of Petróleo Brasileiro S.A.—Petrobras, the fifth-highest settlement ever, however we are seeing a rise in antitrust settlements and growth of global group litigations. Different laws are impacting the investment community in different ways with different processes for recovery resulting in investor challenges to data, damages, and claims submission.
As the year comes to a close, we gathered the most popular FRT Resources on Shareholder Class Actions, our top five blogs focused on antitrust and non-U.S. group litigations and here are the largest settlements filed in 2018.
#1 Petrobras ($3b)
At $3 billion cash, the Petrobras scandal is the fifth largest securities class action settlement in U.S. history against non-U.S. issuers. Institutional investors pursued claims for losses in American Depository Receipts (ADRs) traded on the U.S. exchange. ~100 institutional funds opted out of the class and many privately settled in 2016 and 2017.
In addition to the U.S. Securities Class Action, there are multiple Non-U.S. settlement recovery efforts such as Dutch Foundations, arbitrations in Brazil, and criminal proceedings in Spain.
#2 Forex ($2.3b)
The $2.3 billion FOREX settlement dominated investor attention. Given how many financial institutions used FOREX as part of their investment strategies – and the breadth of time (2003-2015) and financial instruments involved – it was one of the most complex antitrust administrations to date.
The focus on FOREX will only continue because the Class Counsel estimated 200,000 class members and as of July 11, an estimated 60,000 class members had filed (resulting in a 30% participation rate). This means over 70% of class members did not filed, so those that did will receive a significantly larger payout as a percentage of losses due to the low participation rate.
#3 LIBOR ($831m)
For LIBOR bondholders, Barclays, Citigroup, HSBC, Deutsche Bank, and UBS have settled on behalf of plaintiffs, who traded LIBOR instruments over-the-counter.
The plaintiffs in this litigation have yet to resolve related allegations against several other defendants including:
- Bank of America Corp.
- Bank of Tokyo-Mitsubishi UFJ Ltd.
- Credit Suisse Group AG
- JPMorgan Chase & Co.
- Royal Bank of Canada
- UBS AG
#4 Merck ($830m)
A shareholder class action lawsuit against Merck & Co. settled for a total of $1 billion in 2016, with $830 million to be paid out to investors and the rest to attorney fees. The Merck settlement falls into the top 15 largest settlements, all of which are over $1 billion. The top five settlements include Enron ($7.2b), WorldCom, Inc. ($6.2b), Cendant Corporation ($3.7b), Tyco International ($3.2b) and Petrobras ($3b).
This settlement involved Merck’s painkiller drug Vioxx. Vioxx was taken off the market in September of 2004 which resulted in a 27% stock drop one day after the announcement. With this case being over a decade old, it had its unique challenges for the four law firms who have co-led the case. In addition, there were two SEDOLS associated with the original Merck CUSIP. Standard third party class action data providers did not provide this SEDOL and some did not have this SEDOL associated with the original Merck CUSIP. FRT receives multiple data feeds of security identifiers to provide redundancy, and therefore, FRT was aware of the additional SEDOL and was able to file claims for all eligible transactions for both SEDOLs.
#5 ISDAfix ($504.5m)
J.P. Morgan, Bank of America, Barclays, Credit Suisse, Deutsche Bank, RBS, Citi, Goldman Sachs, UBS and HSBC agreed to settle claims for the alleged manipulation of the ISDAfix benchmark rate. On June 26, 2018, the remaining 5 defendants, BNP Paribas, Wells Fargo, ICAP Capital Markets, Morgan Stanley and Nomura Securities International agreed to settle claims for $96 million bringing the total settlement amount to $504.5 million.
To learn more about how FRT can help your firm maximize recoveries in shareholder class action settlements, contact us at email@example.com.
- Whitepapers and Reports:
- A Primer on Shareholder Class Action
- A Primer on Global Group Litigation
- A Primer on Antitrust Litigation
- Illustrating The Outer Time Limits By Which Filing Decisions Must Be Made
- Calculating Inflationary Losses for Comparison to Loss Thresholds
- Global Landscape Continues to Evolve in the Wake of Morrison Decision
U.S. CLAIMS I GLOBAL GROUP LITIGATION I ANTITRUST I LITIGATION MONITORING I BUYOUTS
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