Class action settlement recoveries – Be ready when it matters

3rd base coachThe job of a third-base coach can be pretty boring. Innings or even games can go by without much action. That is, until there is a runner on first, a double into the gap, the lead runner rounding third, and the base coach needs to make a critical, split-second decision whether or not to send him home.

A lot goes into making that decision: the coach’s knowledge of the game, the runner’s speed, the fielder’s arm strength, the number of outs, the score, and the inning. So the third base coach must be ready to call upon his experience and expertise at any time, especially when the game is on the line.

Like a third base coach, asset and investment managers must draw on experience and expertise when handling class action settlement recoveries. While many claims filings are routine in nature, investors need to be prepared for the case that has the potential for a big score.

Recovery Complexities Drive Need for Experience & Expertise

Staying on top of securities class action claim settlements can be frustrating and labor intensive. That task becomes even more difficult when a corporate restructuring, merger, or acquisition is involved. In these types of corporate actions, CUSIPs and ticker symbols are often reassigned, making it harder to identify eligibility and keep track of securities class action filings.

The primary challenge in these cases is recognizing all relevant transactions as they relate to securities litigation. When a change in ticker symbol is triggered due to a merger, acquisition, or name change, a CUSIP tied to one security could be referenced by more than one ticker symbol. Likewise, one ticker symbol might reference multiple CUSIPs if ownership of that particular ticker had changed over a period of time. The same ticker could even reference different securities on different exchanges within the US at the same time.  Without a comprehensive map detailing how a security has been identified over time, it can be easy to miss transactions relevant to a certain securities class action settlement claim, which would result in settlement funds being forfeited.

For example, when Bank of America acquired Countrywide in 2008 (an event that resulted in an $8.5 billion class action settlement), the case involved over 12,000 different CUSIPs and 162 securities across various security classes. Numerous corporate actions led to multiple CUSIP changes under the Bank of America umbrella. All of these CUSIPs were relevant to the class action settlement and had to be tracked in order to ensure full compensation for investors. Piecing together all of the security identifiers and how they are relevant to each specific litigation is required to ensure that the maximum dollar amount is recovered – one minor omission can lead to a rejection of your entire claim and cost millions of dollars.

Similarly, a change in custodian can lead to incomplete filings and missed class action recoveries. One FRT client had a claim submitted by their custodian with a $400k recognized loss, but the custodian did not hold all of the client’s shares. This can happen if the firm uses multiple custodians or has changed custodians over time. FRT was able to look at all their holdings across custodians and calculated $23 million in recognized loss, resulting in the client recovering more than 50 times what they would have from the original custodian filing.

Optimize Recoveries with a Strong Third Base Coach

While the process of filing for class action settlements requires specialized expertise and capabilities, it is not beyond the reach of today’s asset and investment management firms. By partnering with FRT, investors can insure that every eligible filing is accurate and comprehensive, is properly submitted and accounted for, and that all eligible investor funds are recovered and disbursed to the rightful parties.

FRT proactively scours industry data sources in order to identify all cases and relevant securities identifiers to ensure that every possible filing can be made.  Working from client trading data, FRT is able to identify all eligible security positions to ensure that your firm capitalizes on all possible settlement funds.

FRT combines significant investments in technology and processes automation with world class service from a team of knowledgeable recovery professionals. No other class action recovery provider can match FRT’s experience and insight into the growing complexity of the global class action market.

When a big case is on the line, investors trust FRT to bring home the winning run.

Financial Recovery Technologies to Power GRAHM Capital Recovery Group

GRAHM Clients Gain Access to FRT’s Operational Expertise to Maximize Claims Recovery Efforts


BOSTON, MASS, (July 10, 2012) – Financial Recovery Technologies LLC (FRT), a leader in class action settlement recovery, today announced a partnership with GRAHM Capital Recovery Group, LLC (GRAHM) to provide recovery services to the GRAHM client base. FRT will provide the processing infrastructure and operational service and support for GRAHM’s 30+ claims recovery clients. GRAHM will continue to sell claims recovery services in the market using a “powered by FRT” approach. Utilizing proprietary technology and processes backed by state-of-the-art data security, the FRT process identifies eligibility, files claims, and collects more funds than an investor can typically recover on their own.

“After evaluating the merits of an outsourced solution compared to our ongoing infrastructure expenditures, GRAHM determined that the most efficient solution would be to partner with FRT and leverage their expertise,” said James Wolfe, president and chief executive officer of GRAHM Capital Recovery Group. “We reviewed multiple options and found that FRT was best-in-class in providing a comprehensive recovery solution. We’re confident that our valued clients are in good hands with FRT.”

“We welcome the GRAHM clients to FRT and look forward to working with GRAHM for many years to come,” said Rob Adler, president of FRT. “We believe we offer the most comprehensive range of securities class action filing services available, and we’re committed to providing the same level of high quality service that all our clients enjoy.”

About GRAHM Capital Recovery Group
Since 2008, GRAHM Capital Recovery Group has offered administration and recovery services for class action settlements to broker/dealers, hedge funds, family offices, and high net worth individuals, helping clients maximize the number and value of their settlement awards. For more information, go to

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 ( For more information, go to

Increased pressure placed on investment advisor compliance officers

Chief compliance officers (CCO) of broker-dealers and investment advisory firms have seen increased scrutiny in recent years. In the wake of the Dodd-Frank Act, government regulators have increased their oversight of investment firms. The Securities Exchange Commission (SEC) and the Financial Regulation Authority (FINRA) have begun holding CCOs personally liable for failure to comply with new regulations, resulting in disciplinary action against CCOs and their firms.

Increased Pressure for CCOs

One major area of compliance that regulators have focused on is due diligence. CCOs and their investment firms have a responsibility to their clients. Firms must offer products and conduct business in a way that reflects their clients’ best interest. While due diligence often refers to reviewing aspects of a product offering, compliance officers also accountable for due diligence in other areas. For example, overlooking the potential benefit of filing for securities class action settlements on behalf of their clients, or ignoring class actions all together, could leave CCOs open to inquiry.

It is important to have a plan in place for addressing securities class actions. Not only is it in your clients’ best interest, but it can provide real value to the firm. Often times, money that is recovered through securities class action settlements can make up for recent portfolio losses. If you are unfamiliar how to approach class action recoveries, consider the services of a securities class action settlement services like Financial Recovery Technologies (FRT). FRT can help your firm identify and recover all settlement funds that it is entitled to while addressing one due diligence issue that your firm’s compliance officer will no longer have to worry about.

Click here to read the Integrity Research article “The Stakes are Getting Higher for CCOs”.

Click here for a more in depth assessment in the study “The Girl with the SEC/FINRA Tattoo: Disciplinary Actions Taken Against Chief Compliance Officers (November 2010 – June 2011)” by Brian L. Rubin and Katherine L. Kelly.