Last month, Financial Recovery Technologies’ CEO, Rob Adler, joined the American Chamber of Commerce in Hong Kong to discuss the trends he sees on the horizon both globally and in the Asia Pacific region in the context of investment management, global custody and good corporate governance. Highlights included:
- The changing investment landscape requires financial institutions to take a holistic view of their approach to global shareholder litigation. The changes are requiring investors to consider their exposure and upgrade their existing governance, controls, and protocols. Legacy systems and manual processes can’t keep pace with the rapidly evolving litigation landscape and aren’t able to handle today’s data and administrative requirements.
- An investor’s fiduciary duty is getting harder. Since 2010, when the U.S. Supreme Court ruled in Morrison vs National Australian Bank that securities traded outside the U.S. are not within U.S. jurisdiction, many international investors have effectively been barred from filing US class actions. As a result, many cases of fraud are being pushed overseas, with more lawsuits being filed in more countries, involving more lawyers and more diverse funding sources.
- A country’s risk level impacts an investor’s decision on whether to participate in a filing. An investor is likely to participate in any filing in a passive jurisdiction, as there is no downside. But in active jurisdictions, most investors have a “loss threshold” that must be passed before participating.
- Different laws impacting the investment community in different ways with different processes for recovery resulting in investor challenges to data/damages and claims submission. With the rise of antitrust settlements, investors need a new process for these recoveries driven by the complexity associated with damage calculations, data acquisition, and claims submission challenges.
The relevant jurisdictions for the Asia Pacific region include:
- Australia (passive) – download FRT’s Australia Jurisdiction Profile)
- All cases start with registrations (book build) and as they proceed, courts often order registration before settlement negotiations or trial.
- Class members register with administering law firm, substantiating trades with account records.
- Courts and parties use registration to assess class size and losses – Australia has higher % recoveries than in the U.S.
- Japan (low risk)
- The litigation itself is handled by Japanese law firms and funded on a “no-win, no-fee” basis by the organizers. Prior cases have achieved successful outcomes.
- Proceedings are public, with participants listed on court pleadings, although Japanese legal proceedings are less transparent than in the U.S.
- Taiwan (high risk) – download FRT’s Taiwan jurisdiction profile.
- Outside of the U.S., Taiwan is among the most active jurisdiction for securities cases, comprising more than 40% of all non-U.S. and Canada matters
- Despite the volume of cases, we consider Taiwan a high-risk jurisdiction given the limited prospects for recovery, the formalities necessary to join, and the potential for costs to be taxed back.
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For more details on non-U.S. shareholder litigation monitoring and recovery opportunities, please contact your FRT representative or email us at email@example.com.
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- Evolution of Global Litigation: The Rise of Non-U.S. Passive Participation
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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 a 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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