How We Serve the Institutional Investor
All 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.
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
- Describe the salient facts and potentially viable legal theories and remedies
- Tentatively evaluate the merit of potential claims and the likelihood of recovering all or a portion of your loss based on available information
- Discuss any insurance and assets known to be available to satisfy any judgment or settlement
- Identify possible opportunities to advocate for corporate governance changes
- Consider whether any other major institutional investors have filed for lead plaintiff status or can be expected to take an active role in litigation
- 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
Advice Informed by a Wealth of Knowledge 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?
- If opting out is an appropriate course, should you pursue claims on your own or join with other funds?
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.