Securities Fraud Recovery Services
NCPERS has partnered with DIVIDEX Management LLC to create NCPERS Securities Fraud Recovery Services.
For a public plan to fulfill its fiduciary duties in responding to securities fraud losses in its investment portfolios, it needs unbiased advice and information about potential foreign cases as well as a process to seek to determine whether it received all funds due it from securities litigation class action recoveries.
To help its smaller public pension plan members address these fiduciary challenges, NCPERS has partnered with DIVIDEX Management LLC to create NCPERS Securities Fraud Recovery Services.
About NCPERS Securities Fraud Recovery Services
Designed after months of conversations and evaluations with a focus group composed of five target public pensions, NCPERS Securities Fraud Recovery Services was created to help NCPERS pension fund members make more informed decisions as to when and how to take action regarding opportunities to recover securities fraud losses with minimal in-house staff time spent in doing so.
The program is open to the first 25 public pension fund members that enroll. In order to be eligible, the fund must 1) be a pension fund in good standing with NCPERS and 2) have $30 billion AUM or less; or have annual average securities litigation recoveries of less than $2.5 million. The base level of services is available to enrolled members at no cost, with optional services available for nominal fees. Sign up here to enroll.
Participating pension funds will receive:
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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.
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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.
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Reconciliation services to analyze the efficacy of their 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.
Sign up here to enroll in the program, or find more information and Frequently Asked Questions below.
There are three significant fiduciary challenges many institutional investors experience when managing their portfolios’ securities litigation case exposures:
1. Most have few independent and unbiased resources to evaluate the prudence of being active in securities fraud class actions, either as lead plaintiff or in a direct action.
2. Most have no mechanism for identifying and evaluating recovery opportunities to address potential securities fraud losses in foreign-purchased (outside the United States) equities.
3. Most have no way to reconcile or audit revenue collected from settlements of domestic securities class actions against their entitlements to confirm they are receiving all funds due them.
Keep reading to find additional resources and insights on securities litigation trends:
Securities Litigation Actions Settlements and SEC Fair Funds: What’s the Difference?
By: Mike Lange, Esq., Financial Recovery Technologies | Feb. 9, 2023
Securities class action settlements and Securities and Exchange Commission (SEC) Fair Funds may look similar, however, the actors involved – and their motivations – differ in fundamental ways resulting in challenges for participating institutional investors.
Recent Trends in Securities Litigation
By: Jonathan Saidel and Jack Stalzer, Rosen Law Firm | Oct. 28, 2022
Securities fraud class action litigation is a paramount means through which investors of all types, including institutional pension funds, can recover investment losses in cases of corporate misconduct. Securities class actions have been a growing field, fueled by increases in cryptocurrency filings, COVID-19 filings, and SPAC filings.
When Big Funds Lawyer Up
By: Julie Segal, Institutional Investor | July 18, 2019
Shareholders of international stocks are still struggling to efficiently learn about securities fraud cases that affect their holdings and then get objective advice. The difficulties date back to 2010, when the Supreme Court ruled in Morrison v. National Australia Bank that securities traded outside the U.S. are no longer under U.S. jurisdiction.
The Asset Class No One Knows They Own
By: Julie Segal, Institutional Investor | Nov. 6, 2018
Brian Bartow, general counsel for the California State Teachers’ Retirement System, believes pensions need to start treating securities litigation claims as an asset of their plans, just like any other portfolio holding.
Who is eligible to participate in NCPERS Securities Fraud Recovery Services 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 program is open to the first 25 funds that enroll.
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 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 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 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 membership@ncpers.org or call 202-601-2445.