Cash & Liquidity ManagementInvestment & FundingInvestment ManagementReport Suggests US$18bn Unclaimed in Securities Class Actions

Report Suggests US$18bn Unclaimed in Securities Class Actions

In the 12-year period from 2000 to 2012 investors’ non-participation in US securities class actions resulted in over US$18bn being ‘left on the table’ unreclaimed, with just over US$4bn attributable to European investors according to Goal Group.

A research note from the global withholding tax and class action services specialist suggests that non-participation rates have radically improved outside the US since 2007, with the group’s analysis of its class actions knowledge base showing that global non-participation is now between 23% and 24%, with marginal differences between US and non-US eligible investors.  This contrasts with the early years after the Millennium, when non-US investor participation rates were very low indeed.

Historically, non-participation in US securities class actions has cost investors and funds dearly, says Goal. Now, however, wwith the increasing recognition of fiduciary responsibility to ensure effective participation in relevant securities class actions, and recoup investors’ rightful returns, responsible parties can no longer ignore the opportunity to claim damages to which they are legally entitled.

“Ten years ago, many fiduciaries regarded keeping track of the opportunities to make a claim, and going through the processes to do so, as disproportionately daunting, complex and expensive,” said Stephen Everard, chief executive (CEO), Goal Group. “However, this is no longer the case, with a number of expert service providers on the market. 

“It is still astonishing, though, how much in investors’ rightful returns is not being recouped simply because they have not participated in cases for which their claim would be eligible. Further efforts on behalf of investors and beneficiaries are needed, from custodians, fund managers, trustees and trust boards alike, especially since it appears that securities class actions are now moving outside of the US into a number of other global legislatures.”

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