Supreme Court Rules in Favor of Securities Class Action
The U.S. Supreme court recently overruled a lower court’s decision, making it more difficult for companies to prevent securities class actions against their organizations. The court declared that plaintiffs in securities lawsuits do not need to show they suffered economic loss during the class-action certification stage. This would allow shareholders to join a class action against a company before proving that the organization caused investors to lose money.
The Supreme Court rarely rules on securities lawsuits, so this decision was followed closely. Loosening the restrictions on the certification stage increases the potential of more class actions being endorsed by the courts. This opens the door for large amounts of settlement funds becoming available. Once a lawsuit against a company is certified as a class action, any investor that owned shares during the determined class period is entitled to file for claims. It is not uncommon for hundreds of millions of dollars to be awarded to investors in a class-action settlement.
With the uptick in settlements, institutional investors will most likely see an increase in claims notices. Class actions settlement services, like those provided by Financial Recovery Technologies (FRT), can relieve the burden of back office employees who are tasked with responding to claims. Working from client trading data, FRT is able to identify all eligible security positions, precisely calculate recognized loss, and handle all aspects of the claims processing and payment lifecycles, recovering more for institutions than they typically can recover on their own.
Contact us today to find out how Financial Recovery Technologies can maximize you securities class action settlement recoveries.
Click here to read the CFO.com article by Sarah Johnson that details the recent Supreme Court ruling.