After following the action from the sidelines for a while I finally caved in and created a Twitter account about a fortnight ago now. (See my first ‘tweet‘, as posts are called there.) Twitter is a ‘micro-blogging’ site where one can post messages for others to ‘follow’; a message may contain just 140 characters, much like a text message.
The aim of the dual blogging destinations - WV&Z/Twitter - is to add a short, quick-fire message function to the more in-depth, long form With Vigour and Zeal. (So it’s certainly not a replacement!) On Twitter too, I will post on European collective action developments but it will be in a mixture of other legal topics and personal stuff as well unlike the ‘purer’ WV&Z here which remains exclusively focused on collective actions with a European angle.
Some of the things already posted on my Twitter profile are an update on the Northern Rock compensation case (here; see previous post) and comments on Santander’s Madoff settlement in Miami (such as here). Personally, I announced going to a discussion at the New York Public Library last week featuring among others Prof. Lawrence Lessig (here, and followed up here).
To follow me on Twitter, if you have a Twitter account, simply go to my profile and click on the ‘Follow’ button. If you don’t have a Twitter account, you may receive the RSS feed, or, of course, simply drop in if and when to check out what’s new.
Thanks to Bruce Carton, again, for announcing my arrival on Twitter. His Securities Docket has a list of securities counsel to follow on Twitter. Also see the more general LexTweet and Justia Legal Birds for listings of lawyers and others on Twitter.
It’s been a few months since Lovells LLP has published its latest Class Actions Bulletin but it’s still the latest one and still packed with interesting articles, so it’s still revelant to post here.
Topics include the EU Commission’s collective action benchmarks and recent studies, the latest on collective actions in France and the Netherlands, alternative forms of collective actions in Germany (other than the KapMuG), a piece on ‘corporate responsibility - a step in the right direction or towards increased group litigation?’ in England and Wales and ‘Class Actions - a pan-European perspective’.
An update on the article on the Dutch ‘Class Action’ Act - which states that “the Court of Appeal has not yet declared the Royal Dutch settlement as binding upon all shareholders. A hearing is expected before the end of 2008″ - is that the hearing has taken place on 20 November and that the decision is pending.
The trial pitting former shareholders of Northern Rock Plc against the UK Government has kicked off yesterday. (previous post) The Government nationalised the bank early last year and the issue of this judicial review is the level of compensation its shareholders are due under the Banking (Special Provisions) Act 2008. A selection of the many press articles on the case: Legal Week, The Lawyer, FT and The Times.
The trial is scheduled for three-and-a-half days, to end Friday, at the Administrative Court (situated at the Royal Courts of Justice). Catch it while you can.
On 2 October 2007, Hypo Real Estate Holding AG’s (FRA: HRX) shares were trading well above €40 a share. That day, HRX completed the acquisition of Deutsche Pfandbriefbank AG (DEPFA) for more than €5 billion. (press release) At the close of trading yesterday, the shares were at just above €2, the combined group worth just over €400 million.
The board of directors of HRX allegedly withheld price-sensitive information in relation to this acquisition and since then in relation to the combined group’s state of affairs. It wasn’t until 29 September 2008, when HRX announced a ‘major new funding facility’ (press release), that the real, dire financial situation the group was in became clear. In the period between those dates, it had among other things released an operating performance update (7 November), its preliminary 2007 figures (15 January) and several interim reports (31 March, 30 June). The resulting decline of its share price damaged investors, according to the law firm Winheller Rechtsanwälte in this press release (in German, in English; details, in German).
Winheller therefore urges shareholders to claim damages under sections 37b and 37c of the Gesetz über den Wertpapierhandel (in German; Securities Trading Act). Those two sections provide the legal basis for claims against issuers of financial instruments that trade on German exchanges, due to omission of price-sensitive information or publication of untrue information. The statute of limitations for such claims is no longer than three years from the omission or publication, respectively, though it could be as short a period as one year from when the ommission or untruth was known to the third party (WpHG §37b(4), §37c(4)). Hence Winheller’s advice to file a claim no later than 15 January 2009 (this Thursday), one year after publication of the 2007 figures, though arguably the omissions and/or publications continued and were not known until the announcement of 29 September 2008 and therefore a claim by 29 September this year could still be within the limitations period.
Further to these same allegations, last month the district attorney’s office in Munich (with the involvement of Germany’s financial services regulator, Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)) searched Hypo Real Estate’s offices and the homes of former executives and a former chairman (Bloomberg).
The alternative name for this post could’ve been “Does exactly what it says on the tin”. (hint) If you’re not familiar with that phrase, translate that to the more straightforward “What you see is what you get”. (explained or watch) For the three events listed below are literally named after their respective programme contents.
Securities Docket hosted its first webcast Tuesday, entitled 2008 Year in Review - Securities Litigation and Enforcement. (details; via BrightTALK, registration required) It’s free to play from the archive.
Barroway Topaz Kessler Meltzer & Check LLP’s fourth annual Rights & Responsibilities of Institutional Investors conference is forthcoming. It will be held on 12 March in Amsterdam at the Renaissance Hotel. (details) This year’s keynote speaker is former US Secretary of State Madeleine K. Albright.
This conference boasts a number of familiar speakers as well as interesting new ones and covers a wide spectrum of topics, all related to European securities litigation. An outlook on 2009 and the coming ‘wave of actions’, an update on litigation funding, perspectives from regulators and in-house counsel, a discussion of hedge funds’ roles in collective actions and dealing with the difficulties of (lack of) discovery are all in there, as is the big one: ‘how will trustee obligations propel pension funds into securities litigation cases?’
Change of venue: European Securities Litigation Conference has changed its venue to the Radisson Edwardian Mayfair.
This week two reports were published, by NERA Economic Consulting and RiskMetrics Group, both covering securities class action litigation trends of the past year. NERA’s 2008 Trends in Securities Class Actions (report, press release) is its annual year-end study of US case filings and settlements. Securities Docket has a short overview of the report’s findings and additional details on the study from the two primary authors.
RiskMetrics’ Globalization in Securities Class Actions (registration required), authored by Adam T. Savett also of Securities Litigation Watch, is an update to last year’s paper Accountability Goes Global. It ‘explores recent trends in non-US investor interest in US Securities Class Actions.’ For instance, it finds that from 1996 through 2007 there were ‘234 different instances of an international [non-US] institutional investor seeking to serve as a lead plaintiff in a US securities class action’, in 134 different cases. And that ‘[i]n every year since 2002, international institutional investors have filed lead plaintiff motions in more than 5% of all new federal securities class actions.’
One thing you, regular WV&Z readers, are surely familiar with is the report’s latest reason explaining ‘the continued trend’ of non-US investor interest in US securities class actions: ‘The increasing availability and acceptance of securities litigation in non-US jurisdictions.’
Earlier this week I came across a 2006 article by Shook Hardy & Bacon LLP’s Laurel J. Harbour and Marc E. Shelley, entitled The Emerging European Class Action: Expanding Multi-Party Litigation To A Shrinking World. Among other things, the Swedish collective action legislation (Lag om grupprättegång, Group Proceedings Act) is discussed therein (from p.5). (Also see this 2006 intervention by (then-)Deputy Consumer Ombudsman Marianne Åbyhammar of Konsumentverket, the Swedish Consumer Agency.)
That discussion ended with the note that ‘[t]he Swedish Act is to be reviewed at the end of 2006 or beginning of 2007.’ So I e-mailed the authors with the question if that review indeed took place and if so what the outcome was. After exchanges with both, I invited Marc to amend slightly his initial comprehensive response for publication as a guest post. He kindly accepted the invite. With thanks, his guest post is as follows:
In October 2008, the committee to evaluate Sweden’s Group Proceedings Act (SFS 2002:599) released its nearly 300 page report and recommendations (in Swedish; summary, in English). When the Act was adopted in 2002, the law provided for an evaluation after five years. In June 2007, the Ministry of Justice appointed the committee to analyze the cases filed since the law went into effect on January 1, 2003 (for the interest of the readers of With Vigour and Zeal, to my knowledge, none has been filed yet based on alleged misconduct related to securities).
By way of background, the Act requires cases to satisfy several preconditions in order to proceed. Like the U.S. Rule 23, a class action may be brought by an individual or association seeking monetary or injunctive relief on virtually any type of claim. There must be common factual circumstances, and the action must be manageable and a superior way of handling the litigation compared with the alternatives of joinder and test cases. The class must be “appropriately defined” and the plaintiff must suitably represent the class. However, in contrast to Rule 23, class members must opt in to be included as a member of the class and only individuals who have done so will be bound by the judgment.
The committee concluded after surveying the cases filed since 2003 that there has been no abuse of the device and, on the contrary, it has had a positive effect on access to justice for consumers. Despite the lack of abuse and its apparent success, the committee proposes to expand the procedural law in the following way:
Introducing U.S. style contingency fees of up to 30% of the disputed amount, in order to facilitate the financing for the plaintiffs to bring more class actions. The committee’s report specifically cites to the 2006 German Supreme Court decision that a bar on contingency agreements is unconstitutional. The report also proposes an increase of legal aid for class actions.
Allowing plaintiffs to provide notice to class members instead of the court to improve the notification process for greater participation.
Expediting the court’s certification process, particularly with respect to the class definition, to make the device quicker and more effective.
Preserving the opt-in model, despite calls for changing to an opt-out model (either generally or for certain types of claims, as permitted in the Norwegian and Danish class action models).
It is not yet clear whether these proposals will be successful. Interested parties have until January 16, 2009, to submit comments.
The Enterprise Chambers of the Amsterdam Court of Appeals and of the Courts of Brussels both declined to enjoin the transactions that, among other things, saw Fortis SA/NV partially sold off to BNP Paribas. (previous post) The Brussels court issued its decision on 18 November, the Amsterdam court a week later on the 24th. (Amsterdam summary, decision, in Dutch; Brussels, decisionin French and see Beduveld.nl, in Dutch) Plaintiffs’ counsel in the Dutch case is Spigthoff Advocaten & Belastingadviseurs NV.
Both courts though decided to instigate an inquiry (enquêteonderzoek), into the policy of Fortis, the course of events from 27 May 2007 and the transactions that occurred between 26 September 2008 until 7 October 2008, inclusive (Amsterdam) and into the valuation of the shares (Brussels), respectively. Modrikamen, counsel for the plaintiffs in the Belgian case, has stated it will appeal the decision.
In New York, so far at least one action (case detail, complaint dated 22 October 2008) has been filed against Fortis. The proposed class period is between 28 January 2008 and 6 October 2008, inclusive. Plaintiff’s counsel is Wolf Haldenstein Adler Freeman & Herz LLP. If you want to move for Lead Plaintiff status in that case, you must do so no later than 22 December 2008. Scott+Scott LLP has Fortis listed in its ‘Case investigations’ section for the present (here).
One event for in the diary, notes on one that has taken place and updated links here on WV&Z:
Grant & Eisenhofer PA’s 8th Global Shareholder Activism Conference (details, programme) takes place in New York from 4-6 December. (The 9th is in London, 23-24 April 2009.) Alexander Reus of Diaz Reus LLP and Andree Nesselrodt of DekaBank Deutsche Girozentrale, a Diaz Reus client, are on the panel of the luncheon breakout session IV-C Class Action Settlements on the Friday. Unrelated to the event, both Reus and Nesselrodt (a Vice President and Senior Legal Counsel with DekaBank) are quoted in the Financial Times Deutschland (in German) earlier this year, as are Geoffrey C. Jarvis of G&E and Winheller Rechtsanwälte’s Stefan Winheller, on the role German investors may play in US class actions.
ClassActionBlawg.com has published notes on the 12th Annual National Institute on Class Actions conference (previous post), including on the “Class Actions Sans Frontières” presentation.
NERA Economic Consulting’s new topic specific website Securities Litigation Trends has been added to the Resources links section (right column). It has NERA’s reports on SEC settlement trends and shareholder class action trends, settlement documents and a weekly securities blog digest among other things all in one place. In the past few weeks a number of plaintiffs’ firms has changed firm names and domain names accordingly. These have been amended in the Firms / US / Plaintiffs links section (right column).
My friends at Tilburg University have recently launched the Tilburg Institute of Comparative and Transnational Law (TICOM). The Institute “aims to be a leading institute for scholarly research into law as an international phenomenon… [It] questions the relevance of territorial and dogmatic borders delineating both national jurisdictions and the classical areas of law.” (original emphasis) Their link has been added to Resources as well. WV&Z wishes TICOM and all involved all the best.
In a somewhat off-topic post, last night I went to see Malcolm Gladwelllive on stage. He’s got a new book out, Outliers, and his untitled hour-long talk was basically an introduction into his book’s theme, subtitled The Story of Success, and mostly the oral presentation of one of the chapters in the book - Chapter Seven: The Ethnic Theory of Plane Crashes. From the inside cover:
The real secret of success turns out to be surprisingly simple, and it hinges on a few crucial twists in people’s life stories - on the culture they grow up in and the way they spend their time.
On the way home from the theatre I started reading my fresh hard back, signed copy, from Chapter Five: The Three Lessons From Joe Flom. ‘Flom‘ as in ‘Skadden Arps Slate Meagher & Flom LLP‘, the firm’s first associate back in 1948 and now its last living name partner. His story is being told from an expectedly unconventional angle. ‘What were Joe Flom’s opportunities?’
Gladwell is a fascinating storyteller with lots of fascinating stories to tell. (Also see his talk on the ‘ketchup conundrum‘ at TED, below.) Why too is it relevant, in understanding the firm, to know that all four Wachtell Lipton Rosen & Katz name partners were born in 1930 or 1931?