How We Serve the Institutional Investor
ll of us at Heins Mills & Olson take great pride in representing institutional investors of all types and sizes, public and private. Our firm is large enough to offer a full array of services while small enough to value each of the relationships we have with our institutional clients. Since the advent of the PSLRA’s regimen for securities class actions, the institutional investor has assumed a more prominent role in prosecuting securities fraud cases.
Active participation in redressing losses suffered by a corporation’s shareholders, achieving meaningful corporate governance reform, and safeguarding the integrity of the markets takes more than one form. For a decade now, institutional funds have stepped forward to assume leadership roles in class litigation. More and more frequently, though, they are exercising their influence and maximizing their recoveries by opting out of class actions to bring lawsuits in the state courts — either alone or together with other funds.
If your portfolio suffers a significant loss that may have been caused by fraud or other violations of the securities laws, we will first analyze your portfolio and trading activity in light of relevant market developments and corporate news. We will then present the results of our analysis in a preliminary report that discusses the myriad factors to be considered in deciding how to respond to a portfolio loss caused by corporate wrongdoing. The report will:
The HM&O Approach
Evaluation of Potential Securities
Claims
If your portfolio suffers a significant loss that may have been
caused by fraud or other violations of the securities laws, we will
first analyze your portfolio and trading activity in light of
relevant market developments and corporate news.
We will then present the results of our analysis in a
preliminary report that discusses the myriad factors to be
considered in deciding how to respond to a portfolio loss caused by
corporate wrongdoing.
The report will:
□_Analyze your transactions during the
relevant time period
□_Quantify your loss and ascertains the
extent to which it is attributable to fraud that can be isolated
from other factors influencing stock price
□_Tentatively evaluate the merit of
potential claims and the likelihood of recovering all or a portion
of your loss based on available information
□_Discuss foreseeable staff demands
stemming from commencing suit, such as attending depositions,
complying with discovery requests, and monitoring litigation status
□_Present possible strategies for
resolution of your claims
□_Consider any relevant public policy
factors
and Experience
After you have had an
opportunity to consider our preliminary evaluation, we will offer
advice to assist you make an informed decision about whether to
assume a lead role in pursuing class litigation, bring an individual
lawsuit, or passively participate as an absent class member.
Of course, not every loss warrants active participation in
litigation that would divert precious time and resources from your
management of the fund’s investments.
A small loss in the absence of another compelling incentive to
litigate, such as seeking specific corporate governance reform,
would suggest a passive role.
On the other hand, a substantial loss might favor opting out and
obtaining the considerable benefits of bringing an individual
action. For example, a fund can retain its own counsel and negotiate
the fee it wants; manage the litigation as it sees fit; control
settlement negotiations; increase the monetary value of any
settlement or jury verdict; enhance the fund’s portfolio by
increasing the long-term value of the defendant corporation’s
securities; and pursue the precise remedies it wants, such as
specific corporate governance reforms. What’s more, filing suit in
state court does not always mean sacrificing a fund’s share of any
recovery in the related class action. We have represented
several public pension systems that settled their own securities
fraud claims for significant cash payments while preserving their
rights to participate as absent members in the federal class action.
Based on our extensive experience in evaluating and litigating
securities claims, we will help you weigh the advantages and
disadvantages of each option to ensure that your decision rests on a
solid factual and legal foundation and comports with your fiduciary
responsibilities.
Assistance for the Smaller Fund
Understandably, smaller
pension funds have been reticent to devote the time, money and
resources needed to conduct litigation on their own.
But a smaller fund need not forgo the opt-out advantages
already enjoyed by large funds.
Where appropriate, we will explore with you the possibility
of allying with other pension funds to pursue litigation outside the
class. By teaming with
other funds having compatible interests and objectives, you can
bring a single lawsuit that aggregates the funds’ claims.
In this way, a group of smaller funds, public or private, can
surmount real and perceived entry barriers to individual litigation
and generate the leverage to command the attention of defendants.
Acting collectively enables smaller funds to pool expertise
and resources, spreading out contingent attorneys’ fees, and attain
a critical mass that achieves the desired economy of scale.
For more information about collective
litigation,
read “Opting Out of Securities Fraud Class Actions: Not Just for
the Big Pension Funds,” a recent article written by two of our
partners, Samuel Heins and Dylan McFarland.
Development of Monitoring and Litigation Policies
We also offer our
considerable knowledge and experience to help you develop or refine
policies and guidelines for monitoring fraud-related portfolio
losses and considering litigation options.
In particular, we are available to help
you formulate quantitative loss thresholds for answering crucial
questions such as these:
□_Is investigation warranted?
□_Should you consider legal action at
all?
□_Should you consider becoming a lead
plaintiff?
□_Should you consider opting out?
Responsiveness & Close Communication
Responding quickly and
helpfully to your questions and concerns is an imperative at HM&O.
When you want information and advice
now, you get it now.
Not after another client’s needs have
been met.
Now.
At any given time, we represent a small
group of clients in a small number of matters.
No
more clients than we can respond to faithfully, no more matters than
we can manage meticulously.
Because interaction is the lifeblood of
our relationships with institutional clients, Samuel Heins and
Stacey Mills are integrally involved in understanding and addressing
your concerns.
Their years of experience have given
them a deep understanding of the needs and objectives of those
entrusted with the management of public pension fund assets, and a
keen sensitivity to public policy considerations.
We aspire to develop and maintain
long-term relationships with our institutional clients by earning
their trust and confidence.
An essential predicate for achieving
that kind of relationship is the open and frank communication
necessary to harmonize our services with your objectives and to
excel in the pursuit of those goals.
We appreciate that regular interaction with your staff is an
essential part of our role.
A two-way street enables us to
understand your investment policies, objectives, needs and
constraints; to respond accurately and thoroughly to your requests
and directives; and to provide timely information and advice about
pending and potential cases.
At the same time, we respect your
staff’s other responsibilities and know they have a limited time to
perform them.
So, while we maintain close contact
with you concerning all important developments, we take care not to
burden your staff unnecessarily.
The manner and frequency of our
communication will reflect your preferences and time demands, and
take the most appropriate and efficient form.
We make phone calls and send emails
when necessary to respond quickly to your needs or to inform you
promptly of important information.
When time is less urgent and greater
detail and depth are needed, we furnish written communications — e.g.,
comprehensive summaries of pertinent information, data compilations
and analysis, rigorous case evaluation reports, and clearly
articulated recommendations.
Of course, meetings are sometimes the
most effective way to discuss matters demanding further exploration
or to exchange views more dynamically.
While most of our contact is with an
institution’s executive officers and administrative and legal staff
members designated as contacts for a given matter, we welcome the
opportunity to attend board meetings when invited to report on
crucial developments or offer advice concerning important decisions.
