FRT’s Fast Five: Week Ending March 19, 2021
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.
A Hawaii pension fund on Monday was tapped to lead a proposed class action suit accusing Wells Fargo of making billions of dollars worth of risky commercial loans, though the federal judge overseeing the case ordered that the fund must consider applications by law firms to serve as class counsel. Click here to read the full article (subscription may be required).
The chances of the virus spawning a broad wave of securities litigation seem to be slimming. The early months of the pandemic, marked by steep market declines and uncertainty about the virus’ impact on the global economy, brought wide speculation about a possible surge in investor litigation in line with historical trends of securities cases spiking around crises and stock market turbulence. Some major cases were filed in those early months, but after 12 months, only about 25 proposed securities class actions tied to the pandemic remain active in federal courts, according to an analysis by Law360. Six of those have come in 2021, suggesting that the flow of such cases may continue, but not at the level some may have anticipated early on. Click here to read the full article (subscription may be required).
Credit Suisse will overhaul its asset management business and suspend bonuses for some senior executives, as the bank races to contain the damage from the collapse of supply chain finance company Greensill Capital. The Swiss lender had multiple ties to Greensill, including $10bn of funds that offered exposure to the company’s loans and were marketed to the bank’s clients as safe investments. Laying bare the fallout from the deepening scandal, Credit Suisse warned on Thursday that fund investors have threatened litigation, that it could lose clients and the ultimate cost to the bank may be “material” for its operating results. Click here to read the full article (subscription may be required).
A proposed 30 percent cap on gross returns to litigation funders would make a large number of class actions financially unviable, new research by PwC chief economist Jeremy Thorpe shows. When applied to class actions from the past 20 years, the research showed returns in 36 percent of matters would not have covered the legal costs of running the case, let alone adequate returns to the funder. Commissioned by Australia’s largest litigation funder, Omni Bridgeway, Mr Thorpe’s report found even a 50 percent cap would make some actions unviable and leave Australians without access to justice. Click here to read the full article.
Securities litigation cases, including enforcement actions filed by the Securities and Exchange Commission, are on the rise. There were 425 securities litigation cases filed in federal courts during the first two months of this year, representing a nearly 60% increase over the same period in 2020, according to Bloomberg Law’s Dockets data. The recent uptick in non-enforcement-action securities litigation appears to be at least partly explained by two phenomena: (1) increased class action litigation against non-U.S. issuers, as detailed in a report issued by law firm Dechert LLP; and (2) an increase in lawsuits against SPACs. Click here to read the full article.
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