Investor Fraud Cases

Which Institutional Investors are Qualified to act as Lead Plaintiffs
Every year, over 100 securities fraud class actions are filed, seeking to recover billions of dollars in damages. Many of these cases are led by municipal or state retirement systems.

Most institutional investors can qualify as lead plaintiffs, including state and municipal retirement systems, union funds, Taft-Hartley funds, and private and foreign funds. When advising our clients in New York on seeking lead plaintiff status, we carefully consider whether such involvement will maximize a plan's assets, or whether it would be advisable for the fund to take a less active role. We work with clients nationwide to ensure that they are receiving the information they need to fulfill their fiduciary obligations under governing laws.

In a brief by the Secretary of Labor in Bragdon v. Telxon Corporation, (N.D. Ohio), it was explained that:

Not only is a fiduciary not prohibited from serving as a lead plaintiff, the Secretary believes that a fiduciary has an affirmative duty to determine whether it would be in the interest of the plan participants to do so. . . [It] may not only be prudent to initiate litigation, but also a breach of a fiduciary's duty not to pursue a valid claim. . . This position arises out of ERISA's prudence requirement, which encompasses several narrower duties which have evolved under the law of trusts, including the duty to take reasonable steps to realize on claims held in trust.

We provide our clients with case reports which provide recommendations as to whether or not the fund should seek lead plaintiff status, so the fund can ensure its file is properly documented to comply with the Department of Labor's guidance on securities litigation.