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Special ReportShareholder litigation as an ESG enforcement tool
Institutional investors have traditionally sought to advance ESG initiatives through direct engagement, divestment, or proxy voting. As ESG concerns have become more central to investors’ core investment objectives, however, shareholders are relying more on litigation, both to remedy ESG failures and to enforce ESG goals. This trend is most notable with regard to litigation with “environmental” and “social” objectives. “Governance” litigation, meanwhile, is more recently being brought by the world’s largest institutional investors.
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Special ReportColorado fire and police settle with Cognizant
In August 2021, Fire and Police Pension Association Colorado (FPPA), alongside other plaintiffs, reached a settlement with Cognizant Technology Solutions Corporation for $95m (€88.7m).
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Special ReportGlobal markets, global protection: legal representation for institutional investors in global securities cases
Securities class actions have been a staple of the US legal system for nearly half a century; however, it was not until the Morrison v. National Australia Bank decision of the United States Supreme Court that the market for international securities litigation fully opened. Prior to this, with a few exceptions (Royal Dutch Shell in particular), most actions were brought in the United States, as it provided investors with an efficient, inexpensive and fair arena to resolve their complaints. The Morrison decision forced investors to look for remedies in other jurisdictions, many of which have legal frameworks and mechanisms to handle mass complaints but where there had been limited practical experience in pursuing these claims. With twenty years of experience in this field, DRRT has been pioneering securities litigation since well before the Morrison decision.
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Special ReportUSS settlement with Petrobras and PWC Brazilian subsidiary
In February 2018, the Universities Superannuation Scheme (USS) reached a settlement with PWC’s Brazilian subsidiary as part of a class action lawsuit against Petrobras.
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Special ReportDouble-edged benefits of litigation financing
European pension funds have become familiar with class action litigation, often tying it in with their fiduciary responsibilities as shareholders. Cases against UBS regarding its takeover of Credit Suisse; EY as auditor of fraudulent German payments firm, Wirecard; and Silicon Valley Bank, which collapsed in March, are the headliners of 2023.
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Special ReportAI technology and its effects on the new SEC rules
The Securities and Exchange Commission (SEC) recently proposed a new rule to address potential conflicts of interest between investment advisors or broker-dealers and their clients regarding the use of artificial intelligence and predictive data. The proposed rules apply to “all broker-dealers and to all investment advisors registered, or required to be registered,” with the SEC.1
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Special ReportClass actions by European investors on the rise in the name of good governance and fiduciary duty
Deepwater Horizon, Volkswagen (Dieselgate), Wirecard, Silcon Valley Bank and Credit Suisse are recent, high-profile examples of corporate wrong doing resulting in losses for investors. As stewards of retirement savings and guardians of beneficiaries’ interests, it is only natural that pension funds should scrutinise the investments they are making – or outsourcing to asset managers to make – on their members’ behalf. This is a central plank of fiduciary duty.
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Special ReportEuropean pension fund class actions take off on a steep learning curve
What positive developments can we report relating to class actions in UK and European pension funds? What regulatory challenges still need to be overcome to facilitate (for instance, simplify) the environment for class action by UK and European institutions? Where are the key gaps in knowledge among pension funds?
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Special ReportClass actions: Is Europe catching up with the US?
Europe’s institutional investors are latching on to the rewards of joining class actions against investee companies. Many of these are securities lawsuits, pursued when a publicly listed company has not properly disclosed or has misrepresented significant information, affecting the share price when the truth emerges. But so far, the vast majority of these have been in the US. In 2022, nearly $4.9bn (€4.6bn) was recovered in the US courts, according to Institutional Shareholder Services. So, what about class actions in Europe? “The US has had a class action system for over a hundred years that can be adopted for almost every cause of action, whereas the UK has only had class actions since 2015 and it is only available for competition cases,” says Harry McGowan, partner in the securities litigation department at law firm Stewarts.
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Special ReportShareholder class actions in Europe: the benefits and risks of participating
Litigation outside the United States, and in particular in Europe, has been on the rise since the US Supreme Court’s landmark 2010 decision in Morrison v. National Australia Bank. In Morrison, the US Supreme Court ruled that “foreign” (non-US) investors cannot bring federal securities lawsuits in US courts to recover investment losses relating to foreign-issued securities traded on foreign exchanges (known as “F-cubed” claims). As former Justice Antonin Scalia explained, the concern was to prevent the US from becoming “the Shangri-La” of class-action litigation for lawyers representing those allegedly cheated in foreign securities markets. Although federal courts have since struggled to apply Morrison’s effect test consistently, it is clear, more than 10 years later, that the decision has had its intended effect.
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Special ReportManaging risk in securities class actions
Securities class actions (SCA) are a form of collective redress. Shareholders seek compensation for losses suffered as a result of some form of corporate misconduct. They rely upon free market forces, its rules, regulations and factors affecting market price. For professional shareholders such as institutional investors, it is best to look upon any involvement with SCAs as another form of investment yielding a potentially, significant return in future. The duties of any institutional investor – whether as a fiduciary or otherwise – is to focus on what is in the best interests of the fund and its beneficiaries. It does not require the expenditure of more money (or the value of management time) than is likely to be received. What is necessary is the consideration of the issues and the management of risks.
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Special ReportBuilding a class action toolbox for investors
As class actions have started to play an increasingly important role in good governance for UK and European pensions funds, the need to establish best practice in the field is growing.
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Special ReportAP7 notches up legal success against Kraft Heinz
In May 2023, Sweden’s AP7 fund recorded a significant victory for Swedish and other investors when US food giant Kraft Heinz agreed to settle a class action lawsuit for $450m (€421m).
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Special ReportProspects special report 2024: CIOs on what awaits investors
Asset management CIOs and strategists answer key questions about investment for the 12 months and beyond
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Special ReportSustainable finance professionals take stock
IPE asked the responsible investment leads of top European asset owners a key question: has the ESG / green finance movement been effective in achieving a more sustainable economy? Here are their answers
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Special ReportIs sustainable finance working?
Sustainability is now a top consideration for investors, but there is little evidence it is leading to a more sustainable economy
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Special ReportWhat should EU investors do if the Republicans win the White House?
Sustainability-minded investors should wake up to the challenge of right-wing populism and its threat to climate policy
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Special ReportPlenty left for EU sustainable finance policy to tackle
European policymakers have gone full throttle on sustainable finance over the past five years. Do they have the wherewithal to finish the job?
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Special ReportIs there a role for ethics in ESG investing?
What if investors acknowledged that, sometimes, some things are just the right thing to do?
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Special ReportWho decides if investors can pursue sustainability objectives?
Pension funds must be prepared in case their members don’t care about sustainability
