On June 28th, Financial Recovery Technologies’ CEO Rob Adler virtually “sat down” with Jeremy Hill, Group General Counsel at Universities Superannuation Scheme Ltd to discuss a number of topics in the securities litigation space, including USS’ history of managing shareholder litigation and evolution of their shareholder litigation policy, the USS Class Actions governance program, and exploring the Petrobras case and USS’ role as lead plaintiff.
If you missed the webinar, don’t worry. We recap some of the top questions and takeaways from the first half of the webinar and you can watch the full on-demand here.
How did shareholder litigation become a part of your awareness at USS?
Shareholder litigation was a part of the conversation before I even arrived. However, part of my role includes giving the board more confidence in making decisions related to shareholder litigation. This led to a big turning point for the company in taking more of an active role. In 2015, the Petrobras case caused the company to take a whole new look at the company’s involvement in such cases, and little by little the willingness and visibility has increased.
Did you look at peers to determine that USS should be more proactive?
From a pure fiduciary duty standpoint, the company feels they have a fiduciary duty to collect the money that is due to them. Therefore, in terms of having a mechanism to collect settlement, the company is under a duty to do that, i.e. dealing with passive claims.
When it came to approaching claims on the active side, Petrobras was a turning point. This was led by the legal function within USS, taking a look at issues like the nature of the corporate conduct, size of losses and corporate governance issues. The USS team took a look at internal policies to determine where the active lead would be appropriate.
In terms of having a duty to the broader institutional investing community to bring cases to them, I believe that it is something that I feel responsible to do, especially given peer group connections. Additionally, if no institutions take the lead in cases, nothing will ever happen. View a 90-second clip.
How and why do policies play a role in shareholder litigation for you?
Policy is a key area of focus for us. Having sophisticated securities litigation policies and processes that go alongside that are incredibly important. We use peer groups to help in the development process and examine different heads of assessments to look at certain things like the amount of loss on a gross basis, strength of claim, jurisdiction the claim is coming from, cost risks, etc.
Additionally, we try to ensure the policy doesn’t tie us down too much. When we look at any active litigation opportunity, we have to consider the internal capacity we have as a company and within the legal team. The main concern from the Board is typically the amount of time that will be involved. Generally, they are very supportive, however, there is a lot of work involved and it can raise issues if it is taking up too much of the team’s time. View a 02:30 clip.
Passive option vs. non-passive option – If there is no passive option does that change the criteria?
If there is a passive option, we typically tend towards taking that route. For the active route, if there is some specific element of conduct involved that we felt needed calling out, we proceed. Increasingly it is a question of if by taking an active role in litigation, could we produce a better financial outcome as a whole for the pension fund? Determining how to maximize value from proactive evaluation is a key step in this process. View a 70-second clip.
Stay tuned next week for Part 2 of our Q2-2021 FRT Insights Webinar Recap.
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FRT Insights provides an unbiased and comprehensive overview of what is impacting shareholder litigation and how institutions can prepare, monitor, and maximize this unique asset, exclusively for asset owners and asset managers. If you are interested in being a potential speaker in future FRT Insights, email us at email@example.com.
SETTLED CLAIMS I PASSIVE GROUP I ANTITRUST I FUTURE CLAIMS I OPT-IN MONITORING I OPT-OUT MONITORING
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