National Conference on Public Employee Retirement Systems

The Voice for Public Pensions

Securities Litigation Challenges for Public Pensions

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.

For a plan to meet its fiduciary responsibilities and seek to optimize recoveries from securities fraud cases, it needs expertise as well as systems designed to help find, track and manage securities litigation recoveries.

After months of conversations and evaluations with a focus group composed of five target public pensions, NCPERS has partnered with DIVIDEX Management to launch NCPERS Securities Fraud Recovery Services, designed specifically to help NCPERS member smaller pension funds address these challenges. Learn more about the program and find out how to enroll here.

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.