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. There Is No Wave of COVID-19 Shareholders’ Class Actions (Yet)

Early data indicates that COVID-19 continues to be more noise than signal in shareholder litigation – except, perhaps, to the extent that the virus has slowed the pace of new securities class actions. COVID-19 itself has not been much of a factor in private securities filings so far. NERA counted 11 shareholder class actions related to the coronavirus. Stanford has identified 12, including one shareholder class action, against the private prison real estate investment trust Goes Group, filed in July. There have been coronavirus-based shareholder suits against two cruise ship companies, Norwegian and Carnival, but otherwise, the COVID-19 shareholders suits have been against relatively small corporations. In other words, if plaintiffs’ lawyers have plans to target big companies for defrauding shareholders in their response to COVID-19, they’re biding their time. Click here to read the full article.

2. Six Firms Fight To Lead Carnival COVID-19 Investor Suit

Six law firms, including Labaton Sucharow, Levi & Korsinsky, and Pomerantz, are vying to lead a proposed investor class action in Florida federal court that alleges Carnival Corp. hid COVID-19 infections on its ships and spread the virus at ports around the world, causing its stock price to drop twice. Click here to read the full article (subscription may be needed).

3. “Class Actions” in Europe: Steps Toward a Harmonized Litigation Framework

The EU has been seeking to strengthen consumer rights vis-à-vis companies, especially in “mass harm” situations with cross-border implications. After two years of policy debate, the Council has now published a proposal for the Directive on representative actions for the protection of the collective interests of consumers. setting out the agreement reached between the European Parliament and the Council (made up of representatives from each Member State at a ministerial level). The Directive is intended to harmonize consumer rights across EU Member States and to facilitate consumer remedies through collective representation. The Directive would replace and modernize the 2009 EU directive so it addresses the current issues in enforcement of consumer law by increasing the available options for EU citizens. This results in increased litigation risk for consumer-facing industries, both consumer brand manufacturers and service providers. Click here to read the full article.

4. We Will Make New Litigation Funding Rules Work: ASIC

Litigation funders’ high fees and super profits would not be covered by the federal government’s rules shake up, but the corporate regulator said the changes would strengthen existing “light-touch” regulation. Appearing before the Parliamentary Committee on Corporations and Financial Services on Wednesday, Australian Securities and Investment Commission deputy chair Daniel Crennan, QC, said Managed Investment Schemes (MIS) may not achieve the outcomes being sought. “There is considerable interest in the fees and profit margins of litigation funders and the risk of financial default,” Mr Crennan said. “However, the financial services licensing and managed investment scheme regimes do not extend to price or prudential regulation.” Click here to read the full article (subscription may  be needed).

5. Securities Class Action Filings 2020 Midyear Assessment

Plaintiffs filed 182 new securities class action lawsuits in federal and state courts in the first half of 2020, as the COVID-19 pandemic triggered extreme volatility in the financial markets, according to a report released by Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse. The report, Securities Class Action Filings—2020 Midyear Assessment, found that the number of filings remained higher than the historical average, but was 18% lower than in the second half of 2019 and the lowest level since the second half of 2016. The filing slowdown affected both core and M&A filings, which declined by 13% and 25%, respectively. Click here to read the full article.

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