In what situations should an institutional investor consider being involved in a class action?
An institution should consider becoming involved in a class action where its involvement can be meaningful; that is where we, after investigating the case, recommend that the institution become involved based on the quality of the case and based on the size of its losses, i.e., where the losses are such that we believe the institution may be considered by the Court for appointment as a lead plaintiff. If we believe that the case is not of institutional quality or we believe an institution’s losses are insufficient to be considered for appointment as lead plaintiff, we do not recommend that the institution seek appointment as a lead plaintiff. In cases started by other investors where we do not recommend that an institution seek to become a lead plaintiff (or if an institution applies to become lead plaintiff but is not appointed), the institution would still be eligible to receive its proportionate share of the recovery, if any.
