On June 23, 2014, Chief Justice Roberts delivered an opinion in Halliburton v. Erica P. John Fund (“Halliburton II”) addressing two issues of importance to the process of litigating securities class actions, namely:
- Whether to overrule or else substantially modify the holding of Basic Inc. v. Levinson (“Basic”), to the extent that it recognizes a presumption of class-wide reliance derived from the fraud-on-the-market theory; and
- Whether, in a case where the plaintiff invokes the presumption of reliance to seek class certification, the defendant may rebut the presumption and prevent class certification by introducing evidence that the alleged misrepresentations did not distort the market price of the defendant’s stock.
At a glance, the Supreme Court’s decision, as it pertains to each issue described above, can be summarized as follows:
|The Court Held:||Explanation:|
|1. Halliburton did not show a “special justification,” for overruling Basic‘s presumption of reliance.||The “fraud-on-the-market” theory, first introduced Basic, holds that investors in a class do not need to prove their individual reliance on false or misleading information, because in an efficient marketplace, a class-wide presumption of reliance is implied. Halliburton II affirmed the Court’s earlier decision from Basic, thereby upholding the fraud-on-the-market theory as a valid economic framework for proving reliance in securities class actions.|
|2. Defendants must be afforded an opportunity to rebut the presumption of reliance before class certification with evidence of a lack of price impact.||Defendants in securities class actions have always had the right to introduce evidence showing that the allegedly fraudulent behavior did not impact the price of the relevant securities. However, in Halliburton II the Court holds that defendants have the right to introduce such evidence earlier in the litigation process – specifically before class certification.|
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Acquisition Strengthens FRT’s Product Suite and Management Team
Financial Recovery Technologies, LLC (FRT), a leader in securities class action recovery, today announced the acquisition of Financial Market Data Services (FMDS), a leading competitor in the claims filing industry. Upon closing, all of FMDS’ clients and partners will have immediate access to FRT’s state of the art class action claims filing platform, while FRT and its clients will benefit from FMDS’ technology and distribution relationships. The acquisition also strengthens FRT’s management team by bringing aboard FMDS’ president and founder, industry veteran John Regan.
“FRT is excited about the acquisition of FMDS,” said Rob Adler, president of FRT. “We believe that this deal will strengthen FRT, allowing us to continue to drive our own success and expand our service offering to new markets. FMDS has had early success in the class action space and consolidating their operations into FRT reinforces our strength in the market.”
“I’m proud of what our team accomplished the past several years at FMDS and thrilled to join FRT, the leading firm in securities class action claims filing,” said John Regan, president of FMDS. “I believe together we can leverage our distribution relationships and product innovations to further extend FRT’s industry leading position.”
Terms of the deal are not being announced.
About Financial Marketing Data Services
FMDS provides state of the art class action fulfillment services to every aspect of the financial services community. Our patent pending method ensures our clients, and their investors, receive the maximum amount due.
About Financial Recovery Technologies
Founded in 2008, Financial Recovery Technologies LLC is a technology-based services firm that helps investors collect funds made available in securities class action settlements. The firm offers expertise in eligibility analysis, claims filing, disbursement auditing and client reporting. Financial Recovery Technologies provides a proprietary turnkey solution that allows its clients to fulfill their fiduciary responsibilities with transparency and accuracy. Financial Recovery Technologies is a Cross Country Group company (www.crosscountrygroup.com) For more information, go to www.frtservices.com.
Agreement Provides Institutional Investors with Access to World-Class Recovery Services
Financial Recovery Technologies LLC (FRT), a leader in securities class action settlement recovery, today announced that London-based Fiduciary Settlements Ltd. (FSL) has selected FRT to provide its best-in-class claim filing services to FSL’s institutional clients. Utilizing proprietary technology and processes backed by state-of-the-art data security, FRT identifies eligibility, files claims and collects funds made available in securities class action settlements. Offering the most comprehensive range of claim filing services available, FRT will provide FSL’s clients with best-in-class eligibility analysis, disbursement auditing and client reporting, while delivering the highest level of accuracy, accountability and transparency available.
FSL, with its partner FRT, effectively offers a solution allowing institutional investors and investment managers an opportunity to outsource the class action recovery process, comply with their fiduciary responsibilities and recover funds that otherwise would have remained unclaimed. Partnering with FSL and FRT enables clients to adhere to their fiduciary obligations in a far more economic and efficient manner than handling class actions internally.
“FRT’s capability, combined with FSL’s internal information technology, legal, accounting and regulatory capabilities, places FSL and FRT uniquely in the non-US market to provide a consultancy catering to the class action requirements of institutional investors and investment managers headquartered in Europe, the Middle East, Africa, Asia and Australasia,” said FSL’s Head of Advisory and Relationship Management, David Turnbull. “We’re excited to be an integral part of expanding FRT’s reach outside of the US.
“We are pleased to be recognized by FSL for our leadership in the global class action settlement recovery arena,” said Robert I. Adler, president of FRT. “FRT provides a comprehensive and turnkey outsourced solution, and we’re excited to introduce our services to their client base.”
About Financial Recovery Technologies
Founded in 2008, Financial Recovery Technologies LLC is a technology-based services firm that helps investors collect funds made available in securities class action settlements. The firm offers expertise in eligibility analysis, claims filing, disbursement auditing and client reporting. Financial Recovery Technologies provides a proprietary turnkey solution that allows its clients to fulfill their fiduciary responsibilities with transparency and accuracy. Financial Recovery Technologies is a Cross Country Group company (www.crosscountrygroup.com) For more information, go to www.frtservices.com
About Fiduciary Settlements Ltd.
Fiduciary Settlements Ltd. was founded to offer comprehensive securities class actions services to institutional investors and investment managers. FSL aims to partner with firms to meet their fiduciary duties, while maximizing their recoveries from class action settlements. For more information, please contact David Turnbull at firstname.lastname@example.org or on +44 (0)208 877 1131 .