National Conference on Public Employee Retirement Systems

The Voice for Public Pensions

Frequently Asked Questions: NCPERS Securities Fraud Recovery Services

Why was NCPERS Securities Fraud Recovery Services developed?

This program—created in partnership with DIVIDEX Management LLC—was developed to help NCPERS member public pension plans meet their fiduciary obligations and optimize recoveries from securities fraud cases by offering services to small pensions at no cost, with the option for utilizing additional services for a nominal fee. In its first year, this will operate as a pilot program.  

Who is eligible to participate in NCPERS Securities Fraud Recovery Services pilot program?

Active NCPERS member pension funds that have $30 billion AUM or less, or annual average securities litigation recoveries of less than $2.5 million, are eligible to participate. The pilot program is open to the first 25 funds that enroll and will be active from July 1, 2023 to July 1, 2024.

What benefits will my fund have access to if accepted into NCPERS Securities Fraud Recovery Services pilot program?

For the duration of the pilot program, participating pension funds will receive:

  • Up to three free consultations where, upon request, DIVIDEX Management will help your fund evaluate whether it makes sense to pursue a domestic or foreign securities fraud recovery opportunity. Such an evaluation may include a loss analysis and prudence of serving as lead plaintiff or opting-out of domestic cases, or joinder in foreign cases. Additional evaluation services are available for a fee of $500 per case consultation.

  • Free monthly reports containing information on foreign securities fraud recovery opportunities; claims filing deadlines for select class action settlements; and payouts from select large class action settlements.

  • Reconciliation services to analyze the efficacy of the participating member’s securities class action settlement claims filings and recoveries on selected cases. For this service, participating funds will provide DIVIDEX Management with the subject securities transactions and holdings data. In the event a fund elects to receive a Settlement Recovery Evaluation, the cost will be $100 per case, payable directly to DIVIDEX Management.

Participating members may also elect to have DIVIDEX Management provide Foreign Assistance Services—negotiating retention, joinder and litigation funding agreements on behalf of the pension fund—at a cost per filed case of $5,000.

What happens to the pilot program after July 1, 2024?

NCPERS will evaluate the program by seeking comments from participating pension funds. Then, based on comments and evaluations, we will announce by mid-2024 whether the pilot program will be updated in a 2.0 version, open up fully to all eligible funds, or cease.  

How can I enroll?

To enroll, please complete this form. NCPERS will follow up to confirm eligibility and finalize your organization’s enrollment. If accepted, you will need to sign a letter of agreement with DIVIDEX Management. There is no cost to enroll in the program.  

How does the NCPERS Securities Fraud Recovery Services pilot program work?

Once accepted into the pilot program, your designated contacts will receive a welcome packet with details on how to begin to take advantage of the services outlined above, including up to three free consultations with DIVIDEX.

Enrolled members will also begin to receive the monthly emails with information on foreign securities fraud recovery opportunities; claims filing deadlines for select class action settlements; and payouts from select large class action settlements.

Once enrolled, can we get advice as to whether a particular case is worth participating in?

If your fund wants a consultation with DIVIDEX Management with respect to a particular case, you will simply email your DIVIDEX Management contact. Once DIVIDEX Management has completed its evaluation of your fund’s losses and potential damages, it will schedule a consultation with you to discuss DIVIDEX Management’s independent advice with respect to that case. As a pilot program participant, your organization is eligible for up to three free consultations per year.  

Once enrolled in the program, how do we inquire as to whether we got what we should have in a particular settlement?

If your fund recognizes that it has significant losses or holdings in a particular settlement identified in the NCPERS Monthly Report, upon request, DIVIDEX Management will analyze and reconcile your fund’s recovery against an estimate of your entitlement under the settlement and plan of allocation. The claim filing analytics will be provided to the fund for a $100 fee, payable by the fund directly to DIVIDEX Management.  

Would there be any additional work needed to be done by the asset management staff or legal department?

In most instances, DIVIDEX Management will request that your fund provide it with only the relevant transaction and holding data.

What is DIVIDEX Management?

DIVIDEX Management LLC (DIVIDEX Management) is a registered investment advisor that helps pension plans and other institutional investors manage their exposures to securities litigation around the world as an asset. For securities fraud losses in their global portfolios, DIVIDEX Management seeks to help its clients enhance fiduciary oversight and improve recoveries from securities litigation payouts.

The firm offers an independent, unbiased, customized asset management service that is focused on seeking to improve returns without the conflicts of interest arising from self-interested “advisors” that offer some such services for “free.” Instead, as a registered investment advisor, DIVIDEX Management acts as a fiduciary to its clients. DIVIDEX Management has no financial arrangement with any class counsel or litigation funder and neither accepts nor receives any compensation or gratuity from such firms. DIVIDEX Management is only compensated by its clients, now including NCPERS on behalf of its members. Learn more about the firm here.

How do the services included in NCPERS Securities Fraud Recovery Services pilot program compare to DIVIDEX Management’s broader offerings?

Some of the largest public pension plans have retained the RIA firm DIVIDEX Management LLC to help manage their portfolios’ securities litigation case exposures as an asset. View this chart to see how the pilot program services compare to those currently offered to their larger pension fund clients.

Does NCPERS receive any compensation from litigation cases tied to the pilot program?

No, NCPERS does not receive any payments related to litigation and is not being compensated for operating this program.

Who should I contact if I have additional questions?

Please email or call 202-601-2445.