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ISS' Securities Class Action Services has scheduled a webinar on the noteworthy Converium Holding AG case in the Netherlands. The webinar will be held on Wednesday, Feb. 22, at 10 a.m. EST (3 p.m. GMT).

The Converium case is the first time that a European court has approved a class action settlement on an opt-out basis (U.S. style) regarding the securities of a company not based in the Netherlands, whose securities were traded on a foreign exchange, and where the class included few Dutch residents. The settlement, worth an estimated $58.4 million ($40 million from Converium and $18.4 million from Zurich Financial Services), presents a notable opportunity for asset recovery in its own right. Significantly, it may also demonstrate that investors have legal recourse in Europe even if they are left out in the cold by the changing legal landscape in the United States.

With settlement dollars in non-U.S. actions averaging almost $500 million per year over the past decade, global recovery potential could accelerate as investors look to countries like the Netherlands to recoup their losses.

To register for this webinar, please click here.

Are you following the Sino-Forest securities class action case?

We are. It's a high profile class-action case in Canada that has significant shareholder implications.

ISS Securities Class Action Services is hosting a Jan. 17 webinar (at 11 a.m. EST) to discuss the key elements of the case outlined in our case brief.

To register, click here.

ISS has named Yovanka Bylander as its new Head of Securities Class Action Services. ISS' Securities Class Action Services business serves more than 300 institutional investment clients, leveraging its large collection of securities litigation data and its robust claims filing operation to maximize investors' class action recoveries. 

"For more than a decade, Securities Class Action Services has improved investor performance through effective recoveries management," said Stephen Harvey, Head of the ISS Governance Business. "We are confident that Yovanka's 18 years of professional experience and proven track record in launching and growing businesses will set our Securities Class Action Services business on a new path of innovation and growth." 

Billions of dollars each year are recoverable by investors in securities class-action lawsuits. Yet, the reality is that less than half of the eligible claims are filed in many cases, resulting in those settlement dollars going unclaimed. In fact, there is almost $19 billion in pending or final settlements for which the claim-filing deadlines have not passed. 

"For institutional investors extending their fiduciary responsibilities to recovering lost assets resulting from fraud, ISS' Securities Class Action Services represents a turnkey processing solution that is proven, secure, and low cost," Bylander said. "There is a tremendous amount of money at stake for investors. With the most extensive securities litigation database in the industry and a proven end-to-end claims processing platform, we are maximizing returns for our clients in the U.S. and abroad." 

Before joining ISS, Bylander was acting CEO of Hawkstone Capital LLC, a $200 million Europe long/short fund in which she was actively involved since it launched in 2006. Prior to Hawkstone, she was an equity analyst, covering Latin American bank stocks at Morgan Stanley and Fox-Pitt Kelton. At Morgan Stanley, she was an integral part of a leading Institutional Investor ranking research team and was an important contributor to a $2 billion Brazilian bank equity placement--one of the largest such transactions at the time.

ISS' Securities Class Action Services business employs 18 full-time case research and operations professionals and files almost a half-million claims each year on behalf of its clients. The singular focus of the service is to provide asset managers, asset owners, and hedge funds with the highest return possible on their settlement claims. ISS offers its Securities Class Action Services on an annual fixed-fee subscription basis or through a no up-front cost contingency arrangement.

For more on Securities Class Action Services, please click here.

ISS invites you to join us for a webinar on corporate governance reforms through securities class actions. The webinar will examine the rise of institutional lead plaintiffs, the impact of institutional lead plaintiffs on settlement size and attorneys' fees, key settlements with governance reforms, and the future of reform through securities class actions.

The hour-long webinar will start at 2:00 P.M. EDT. To register please click here. To read a recent Securities Litigation Watch blog posting on this subject click here.

As head of research for ISS' Securities Class Action Services, I will moderate the panel. I will be joined by the following distinguished guest speakers:

Among their many publications, Professor Cox and Professor Thomas have co-authored several important articles addressing securities class actions and governance issues including Does the Plaintiff Matter?: An Empirical Analysis of Lead Plaintiffs in Securities Class Actions, 100 Columbia Law Review 101-155(2006), and There Are Plaintiffs and ... There Are Plaintiffs: An Empirical Analysis of Securities Class Action Settlements, 61 Vanderbilt Law Review 355-386 (2008). They also co-authored the often cited essay Leaving Money On the Table: Do Institutional Investors Fail to File Claims in Securities Class Actions?, 80 Washington University Law Quarterly 855-881.

As institutional shareholder activism has increased over the past 30 years, so has the breadth and sophistication of its methodology. Since the mid-1990s, securities class action lawsuits in particular have played an important role in this evolution. Institutional activism through securities class actions has since grown into an unusually effective and increasingly prevalent method for increasing class recoveries, reducing litigation costs, and effectuating corporate governance reform.

On Friday the Federal Housing Finance Agency (FHFA), which manages Fannie Mae and Freddie Mac, filed a number of law suits against the following 17 financial institutions in connection with their sale of almost $200 billion in residential private-lable mortgaged-backed securities to Fannie and Freddie.

1. Ally Financial Inc. f/k/a GMAC, LLC
2. Bank of America Corporation
3. Barclays Bank PLC
4. Citigroup, Inc.
5. Countrywide Financial Corporation
6. Credit Suisse Holdings (USA), Inc.
7. Deutsche Bank AG
8. First Horizon National Corporation
9. General Electric Company
10. Goldman Sachs & Co.
11. HSBC North America Holdings, Inc.
12. JPMorgan Chase & Co.
13. Merrill Lynch & Co. / First Franklin Financial Corp.
14. Morgan Stanley
15. Nomura Holding America Inc.
16. The Royal Bank of Scotland Group PLC
17. Société Générale

The Supreme Court's June 2011 decision in Wal-Mart Stores, Inc. v. Dukes appears to stiffen the class certification standards in employment discrimination class action cases. A broader question, however, is whether the Court's opinion will have an impact on other class action types, such as those involving alleged violations of the securities laws. This important question may have its first test in the pending class action against bailed-out insurer American International Group (AIG). In its consolidated complaint filed on  May 19, 2009, a nation-wide class of investors led by the State of Michigan Retirement System (SMRS) sued AIG for violations of the securities laws in connection with its role in the mortgage-backed security crisis. On August 17, 2011, in a memorandum of law in opposition to SMRS's motion for certification, AIG became one of the first defendants to assert the Wal-Mart v. Dukes opinion in an attempt to defeat certification in a securities class action.

Background

For a federal securities class action to survive the court must certify the class pursuant to Federal Rule of Civil Procedure 23. This requires that the class must satisfy several elements of the certification test including commonality, adequacy, numerosity, and typicality among others. In the Wal-Mart case the primary focus was on the commonality prong of the test, or the requirement that "there are questions of law or fact common to the class." 

Wal-Mart v. Dukes was an employment discrimination suit brought on behalf of all female Wal-Mart employees. The class of female employees asserted that Wal-Mart's practice of allowing its managers discretion over pay and promotions, and their unwillingness to "cabin" or limit that discretion, was a "policy" that created a disparate impact on all female Wal-Mart employees.

As discussed here by Securities Litigation Watch, while credit-crisis securities class action filings have seemingly dropped off the map credit crisis related settlements are just hitting their stride. Today, lead plaintiff counsel in In Re Wachovia Preferred Securities and Bond/Notes Litigation announced a $627 million settlement against Wells Fargo, who acquired Wachovia in early October 2008 for $12.7 billion. The deal, also reflected in Wells Fargo's Quarterly Report to the SEC today, is comprised of a $590 million settlement with Wachovia and its affiliated entities and an additional $37 million settlement with Wachovia's auditor, KPMG LLP.

The consolidated class action complaint, filed by lead plaintiffs Orange County Employees' Retirement System, the Louisiana Sheriffs' Pension and Relief Fund, and the Southeastern Pennsylvania Transportation Authority, accused Wachovia of making misleading disclosures relating to the sale of securities between 2006 and 2008. The statements related to the quality of assets linked to the mortgage portfolio of Golden West Financial, a California home lender it had acquired. Specifically, the claims asserted that the Wachovia offering materials at issue misrepresented and/or omitted to disclose material facts concerning the nature and quality of Wachovia's  "Pick-A-Pay" mortgage loan portfolio, and that Wachovia's publicly disclosed loan loss reserves were in violation of Generally Accepted Accounting Principles ("GAAP").

According to Bloomberg News, Wells Fargo agreed to the settlement in order to avoid the "distraction, risk and expense of ongoing litigation," but admits no liability on the part of Wachovia. If the settlement is ultimately approved by Judge Richard J. Sullivan of the U.S. District Court for the Southern District of New York it would be among the 14th or 15th largest securities class action recoveries. It would also eclipse the Countrywide settlement ($624 million) as the largest credit-crisis related settlement to date. According to MarketWatch it is believed to be the largest settlement ever in a class action case asserting only claims under the Securities Act of 1933. And, it represents one of the handful of largest securities class action recoveries ever obtained where there were no parallel civil or criminal securities fraud actions brought by government authorities.

ISS invites you to join us for a webinar on the impact of the U.S. Supreme Court’s historic Morrison v. National Australia Bank decision, which continues to have major implications for pension funds and other institutions that own shares in non-U.S. companies. The webinar will examine the Morrison decision, how it has been interpreted by lower courts in the year since it was decided, relevant SEC developments, and the impact on both U.S. and international market participants.

The hour-long webinar will start at 11 A.M. EDT (4:00 P.M. BST, 5:00 P.M. CEST). As head of research for ISS' Securities Class Action Services, I will moderate the panel. I will be joined by the following distinguished guest speakers:

*Beata Gocyk-Farber, a partner with Bernstein Litowitz Berger & Grossman LLP. Her practice focuses on securities fraud actions, complex commercial litigation, and trial practice. She was a senior member of the litigation and trial teams of some of the most noteworthy securities class actions in history, including the WorldCom and HealthSouth litigation. Gocyk-Farber also is in charge of the firm’s European institutional investor relations and is counsel to many of the firm’s European-based clients.

*Deborah R. Hensler, PH.D., Judge John W. Ford Professor of Dispute Resolution and Associate Dean, Graduate Studies, Stanford Law School. Professor Hensler is the organizer of the Stanford Globalization of Class Actions Exchange, which is spearheading international research on class actions and mass litigation, and the co-editor of the recently published volume, The Globalization of Class Actions. Professor Hensler is an associate research fellow of the Oxford Centre for Socio-Legal Studies, has taught at the University of Melbourne (Australia), and has been awarded a visiting professorship to Tilburg University by the Royal Netherlands Academy of Arts and Sciences.

To register for this webinar, please click here. To read a recent Securities Litigation Watch blog posting on the Morrison decision, please click here.

On July 18, 2002, a massive multinational shareholder class filed suit against Vivendi alleging that the French entertainment giant made false or misleading statements regarding its financial health in 2001 and 2002. In a securities class action environment where jury verdicts are almost unheard of, on January 29, 2010 a jury found that Vivendi made 57 false or misleading statements regarding its financial health in 2001 and 2002. The verdict, reached after fourteen days of deliberation and a three month trial, was estimated by counsel to be a whopping $9 billion ($4 billion in potential actual damages plus up to $5 billion in prejudgment interest).

The success of plaintiffs' counsel in Vivendi was short-lived, however.  Vivendi's ordinary shares traded on the Paris Bourse while its American Depository Receipts (ADRs) were listed and traded on the NYSE. Following the Morrison v. NAB decision (discussed by Securities Litigation Watch here), the question remained whether Morrison's "transactional test" would preclude a portion of the Vivendi class from the forthcoming damages award. On February 22, 2011 Judge Richard Holwell of the U.S. District Court for the Central District of California applied Morrison to exclude purchasers of ordinary shares via the Paris Bourse even though they were registered with the SEC. While both U.S. and non-U.S. purchasers of ADRs on the NYSE remained in the class, the removal of purchasers of ordinary shares was estimated by Vivendi's counsel to have reduced the potential damages by as much as 90%.   

Given the forced exodus of purchasers of ordinary Vivendi shares in the U.S. case, the question becomes if, when, and where investors may pursue their rights against Vivendi in other countries. It appears that at least one investor association (here) has taken the lead in pursuing a collective action against Vivendi in France. However, the proposed action by the 'Les Petits Porteurs De Vivendi" or "Small Holders of Vivendi" underscores the trouble that investors face when pursuing class actions outside of the U.S. or Canada. The request for participation in the Small Holders of Vivendi defense association is simply that, a request for participation. Since no settlement or judgment has been reached, participation in the association does not in itself guarantee a successful outcome at trial or at the negotiation table. And, it comes with an initial fee of 95 Euros.