1. Securities Litigation and Fiduciary Duty
TLFFRA Pension Conference
Tuesday, October 3 | The Woodlands, Texas
Securities Litigation and Fiduciary Duty
Speaker:
Jennifer Pafiti, Esq., Pomerantz LLP

2. Fiduciary Duty
The Law
The Application

3. Duty of good faith
Duty of care
Duty of loyalty

4. Duty of Good Faith Best interest of the institution
Managing corporate assets
Disclosing conflicts of interests

5. Duty of Care Business decisions handled with care
Exercise diligence and prudence: Ordinary Business Person test

6. Duty of Loyalty Fund’s interest above trustee No self-dealing
No usurping

7. What if it goes wrong?
Business
Judgment
Rule

8. Courts will uphold the business decision if: Acted in good faith
Had a reasonable basis for the decision
There was a business purpose for the decision

9. Careful Trusteeship
Education
Present assets
Future assets

10. Have I captured sufficient information to exercise solid judgment and make an informed decision?

11. Informed Decisions

12. LITIGATION AS AN ASSET?
How many new securities class actions filed in the U.S. each year? 30
300
3000

13. LITIGATION AS AN ASSET?
How many new securities class actions filed in the U.S. each year? 30
300
3000
Note: health and technology sector saw nearly 30% of these filings with the finance sector filings a little over 16%. And in H1 of 2017 we already have 226 new securities class actions alleging fraud - that's a 49% increase from H % of companies listed on a major US exchange will become subject to a filing - that is 1 in 11 companies. 

14. How many settlements each year? 5 70 100

15. 100 How many settlements each year? 5 70
Note: 113 settled in Only half the cases filed between 1997 and 2016 have settled, 42% were dismissed. Less than 1% go to trial. Remaining % are ongoing.

16. How much in unclaimed settlements? $1.8 million $18 million
$18 billion

17. $18 billion How much in unclaimed settlements? $1.8 million
Note: I've spent a great deal of time educating institutional investors on the importance of filing claims in settled cases. Many pension funds 

18. Portfolio Monitoring Services

19. PORTFOLIO MONITORING SERVICES
Real time evaluation of losses
Personalized monthly reporting
Proactive vs. reactive

20. Claims Filing Services

21. % of claims filed?
30%
50%
75%

22. % of claims filed?
30%
50%
75%
Note: I've spent a great deal of time educating institutional investors on the importance of filing claims in settled cases. Many pension funds do not play close enough attention to these claims and assume their custodians or money managers  will file and collect the funds but many do not. 

23. Specialist Legal Advice
Move for lead plaintiff
Remain passive
Opt-out
Move for lead plaintiff - Note: the presence of an institutional lead plaintiff increases the size of securities fraud class action settlements
Remain passive – Note: a lot of my practice work is telling clients why they shouldn't become involved in a case

24. Summary
Careful Trusteeship
Know your assets
Informed Decisions

25. Jennifer Pafiti
Call: