On 4 March, the London School of Economics and Political Science hosts the fifth and final lunchtime lecture in its Thinking Like a Social Scientist (Lent Term) series: Risk versus responsibility in the regulation of the company. (It follows today’s penultimate lecture, Risk-Based Regulation: Rethinking from a Lawyers’ Perspective.)

‘This lecture will explore the tensions that exist in company law between, on the one hand, holding managers accountable to shareholders and ensuring that they do not use corporate power for their own benefit, and on the other, ensuring that regulation that holds them accountable does not excessively interfere with managerial authority which is central to value creation through the corporate form.’ (details) Podcasts of LSE events are normally available within two working days after the event.

Later on the 4th, Weil Gotshal & Manges LLP’s webcast Aligning Compensation with Shareholder Value: Avoiding Bonusgate takes place, the first in its 2010 Litigation Seminar Series. Topics discussed by the panel will include recent and historic court decisions and new “say on pay” proposals. (CLE accredited; details; LinkedIn event)

Former UK Prime Minister and leader of the Labour Party Tony Blair is this year’s keynote speaker at the fifth annual Rights & Responsibilities of Institutional Investors conference in Amsterdam, 11 March. Barroway Topaz Kessler Meltz & Check LLP and Institutional Investor co-host. This year’s case studies examine the Bank of America takeover of Merrill Lynch and the German Model Case Act (KapMuG) in general and the Hypo Real Estate Holding AG case in particular. (details; programme)

And on the 16th, London-based Duane Morris LLP partner and New York State Bar Association’s International Section Vice-Chair Jonathan P. Armstrong ‘will look at the litigation climate in the UK with an emphasis on those issues which affect business between the UK and the US [followed by] a roundtable discussion on the state of cross-border litigation.’ (details; LinkedIn event)

One event that will not return is the two-day European Securities Litigation Conference that took place in London in March last year. (previous post) Sad.

While in law school in London I came across the US area of law of securities fraud class action litigation, but the subject wasn’t taught in class here. I read about a case settlement in the press, it must’ve been 2004. I was fascinated. Since then I’ve been following the cases and legal developments and gotten to know the players. That led to a summer associateship in 2005 and, since 2006 as long-suffering readers are aware, the writing about securities litigation in the form of this weblog, on Twitter and in publications such as the Financial Times and Legal Week.

On 21 January 2010 I took the oath to become a fully qualified attorney and counselor-at-law licenced and admitted to practice law in all courts of the US State of New York. It shouldn’t be much of a surprise to learn that my practice will focus on representing private and institutional investors in securities class actions, derivative suits and deal litigation. Notably though, like this weblog, from a European’s point of view. The emphasis is on representing European clients in US proceedings from my office in the City, London’s financial district, working with other firms as co-counsel where appropriate.

In addition, I serve as liaison counsel to firms and attorneys in handling the European side of discovery in cases and assisting in any matters that require being handled with locally by US-qualified counsel.

Please update the contact details you have for me and of course I welcome your queries. When in London, make sure you drop by.

Werner R. Kranenburg
Attorney & Counselor-at-Law

Kranenburg
No. 1 Poultry
London EC2R 8JR
United Kingdom
+44 20 3174 0365 (telephone)
(e-mail)

http://kranenburgesq.com

In its latest annual report, NERA does not separately track or comment on filings against foreign issuers, except for a footnote on the Vivendi trial (p. 11). Stanford does. (Both reports are discussed in-depth by learned friends at the 10b5 Daily (here and here) and D&O Diary and elsewhere, such as at the AmLaw Daily and Bloomberg.)

In Stanford’s 2009 Mid-Year Assessment the Class Action Filings-Foreign Index (CAF-F Index) was introduced, which tracks filings against non-US issuers relative to total filings. It found that “[t]he frequency of filings against issuers with non-U.S. headquarters has increased in recent years” from 6.8% of filings during 1997 through 2003, to 13.3% of filings during the next five years, peaking at 13.8% (31 filings) in 2008. This is all the more noteworthy since “the share of foreign companies listed on the major U.S. exchanges [NYSE and NASDAQ] has actually decreased” from 13.3% to 10.7% between 2002 and 2008. (p.7)

A key finding of its year-end report is however that “[a]fter peaking at 16.4 percent in 2007, the percentage of filings against foreign issuers declined to 13.5 percent in 2008 and to 12.4 percent in 2009.” (p.11)

What’s more: in Canada, class action filings will be up this year (Financial Post, thanks to AB Data); also see NERA’s Trends in Canadian Securities Class Actions (study).

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.

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.

Among other players are Lord David Pannick QC of Blackstone Chambers (instructed by White & Case LLP) for SRM Capital, one of the bank’s two biggest shareholders at the time (also see The Times); George Bompass QC of 4 Stone Buildings (instructed by Edwin Coe LLP) for the 150,000 individual shareholders that account for 25% ownership; and Lord Anthony Grabiner QC of One Essex Court (instructed by Slaughter and May) for the Commissioners Of Her Majesty’s Treasury.

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.

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).

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.

The Ronseal prize however goes to the Euromoney Institutional Investor Plc’s inaugural European Securities Litigation Conference. (Main sponsor: Bernstein Litowitz Berger & Grossmann LLP) It takes place on 30 and 31 March in London at the Radisson Edwardian Marlborough. (details, programme)

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.

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.’

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:

1. 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.
2. Allowing plaintiffs to provide notice to class members instead of the court to improve the notification process for greater participation.
3. Expediting the court’s certification process, particularly with respect to the class definition, to make the device quicker and more effective.
4. 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.