Institutional Investor Services
Tripp Levy PLLC is committed to helping investment managers and trustees protect their funds’ assets and recover losses. The firm identifies market developments that may call for action on behalf of our institutional investor clients and monitors settlements to ensure that our clients recover all of their potential claims.
The firm provides two monitoring services for its public and private institutional clients: settlement monitoring and claims monitoring. Settlement monitoring is intended to alert clients to settlements of pending cases, thus enabling the firm to assist its clients in preparing, submitting, and ultimately recovering settlement proceeds in cases that have been resolved. Claims monitoring, on the other hand, is intended to alert clients to significant developments that suggest fraud or violations of shareholders’ rights and interests so that each client can make an informed decision whether to pursue class or derivative litigation, commence individual litigation, take some other action, or take no action at all.
The firm provides settlement monitoring and claims monitoring to its institutional clients free of charge and with no obligation on the part of its clients. If the monitoring program identifies a particular matter that a client wishes to pursue, either as class or derivative action or as individual litigation, that undertaking would be the subject of a separate retention agreement between the client and the firm on a case-by-case basis.
As part of the monitoring process, the firm advises clients of opportunities to recover pro rata shares of settlement proceeds in settled class actions where the client has not been active. To provide settlement monitoring, the firm regularly receives information about proposed settlements of pending class actions and derivative litigation from a variety of sources, including subscription services, claims administrators, public news sources, other law firms with which Tripp Levy works, and existing clients of the firm. That information is compared against a secure database containing detailed information about our clients’ securities holdings, including dates of purchase and sale, purchase or sale prices, shares bought or sold, and profit or loss information.
When an institutional client owns securities that are affected by a proposed class action or derivative litigation settlement, one of the firm’s partners contacts the client to bring the settlement to the client’s attention, to discuss the client’s rights with respect to the settlement and potential interests in the settlement, to review the terms of the settlement with the client, and to assist the client in preparing a claim against the settlement fund where appropriate. If the client decides to submit a claim, the firm also follows up to make certain that the claim is timely and properly processed. Because of the firm’s substantial expertise in administering class action and derivative litigation settlements, as well as its close relationship with one of the largest third-party settlement administrators in the country, the firm is able to render substantial assistance to its institutional clients in the settlement process.
The firm recognizes that institutional investors do not want to divert resources unnecessarily or take an active role in every case, and that it is often in a large client’s best interest simply to file a timely claim form to participate in a settlement. Our philosophy is to work with our clients to select only the most appropriate cases, based on a variety of factors, including the size of the loss, the strength of the potential claim, geographical or public policy considerations, and whether other major institutional investors are likely to take an active role in the litigation.
The firm has developed a proprietary computer system to help monitor its clients’ portfolios to allow it to provide the most comprehensive claims monitoring possible. Information about the firm’s institutional clients is inputted into a secure database, and the computer system receives additional data from a variety of public and proprietary sources in addition to the work undertaken by the case evaluation teams. The computer system matches news about significant potential claim events (such as earnings restatements, indictments, substantial stock price drops, securities filings, merger proposals or agreements, and the like) against the client’s holdings and identifies instances when any particular client’s holdings have been affected by such a potential claim event. The firm can also customize its claims monitoring program to meet the needs of individual clients (i.e., to establish certain threshold or triggering events that will also be monitored).
For institutional clients, the firm reviews and analyzes this information and provides analysis and recommendations to its clients. This analysis includes the size of any loss suffered by the client, the nature and seriousness of the problem that caused the loss, the strength of any potential securities fraud action or shareholder rights transactional claim, the potential for recovery or increased merger consideration, corporate governance failures or public policy violations that may have contributed to any problem, and the benefits and burdens, if any, to the client of actively participating in litigation, either by seeking lead plaintiff status in a class action or pursuing an individual action. With respect to potential settlements in securities actions, whether a securities fraud action, a transactional case, or a derivative action, the firm will discuss with the client whether it is appropriate to seek corporate governance changes at the company as part of a settlement. These corporate governance changes are designed to prevent future problems at the company, especially where the client continues to be an investor in the company.