Coming to Terms: Clarifying Settlement Nomenclature (Part 2)
In Part 1, we clarified how terms like “No Claim Form” and “Direct Payment” reflect the underlying causes of action and shape settlement administration, helping investors better understand their role and the ease of participation. In Part 2, we turn to other settlement types where claim and payment processes vary more widely. These cases often defy rigid categorization, but understanding their patterns can still help investors anticipate participation requirements and recovery potential.
Other Settlement Types
The claim and payment processes used for other types of settlements vary depending on the causes of action alleged and the nature of the impacted instruments. While cases follow patterns to some degree, there are enough variations to prevent firm categorizations like the above settlements.
Wealth/Retail Investment Products: No Claim Form – Direct Payment
Many class actions allege wrongdoing involving mutual funds and other products more likely purchased or held by wealth, retail, and small entities, as opposed to large institutional investors. Others claim wrongdoing by Holders manage investment accounts including improper assessment of fees, distributions, or tax treatment. Most of these will be No Claim Form and Direct Payment settlements because corporate records permit identification of harmed instrument or account owners, and compensation amounts are frequently formulaic based on data that is also in the company records and is not unique to Claimants.
Crypto related settlements: mixed Claim – Direct Payment
SEC enforcement actions recover more for crypto investors than private suits. Most agency Fair Funds are No Claim Form and Direct Payment, particularly if there’s an initial coin or token offering. Corporate documents can be used to identify who participated in these offerings. However, if after the offering occurred, the coins or tokens traded in secondary markets, then like the securities class actions, a claim submission process will be needed as losses depend on each Claimants transaction histories. The administration burden is eased by block chain technology. Claimants need only give their wallet information for the Administrator to access their transaction histories.
As settlement types continue to diversify, investors must navigate a growing range of claim and payment processes shaped by the nature of the alleged misconduct and the instruments involved. While some cases follow familiar patterns, others like those involving wealth products or crypto assets, introduce new complexities and hybrid models. By recognizing these variations and understanding how they impact eligibility and compensation, investors can better prepare for participation and maximize recovery opportunities.