It has always been an option for any member of a class action to "opt out" of a class settlement and pursue a separate (and presumably greater) recovery. In most cases, the cost and complexity make it unfeasible for individual plaintiffs to litigate their cases separately. However, there is a growing opt-out trend in securities class actions, especially on the part of larger institutional investors who have the resources, incentives or shareholder pressures to do so.
On the premise that opting out is more lucrative, some plaintiff firms openly court institutional investors and other members of the class action as a settlement draws near. This shift creates many problems for the defendant companies, who must address a large and unpredictable exposure from opt-out claims over and above the class action settlement or trial award. Plaintiffs also face an important "bird in the hand" decision regarding any proposed settlement versus initiating an independent lawsuit that carries no guarantees.
Defense And Plaintiff Representation In Class Action Opt-Outs
Shepherd, Finkelman, Miller & Shah, LLP (SFMS) has extensive experience in all facets of class actions, representing plaintiffs and defendants in cases nationwide. Our attorneys have represented individual and institutional investors in FINRA arbitrations, have served as lead counsel in countless class actions, and have litigated both sides of securities opt-out lawsuits.
On behalf of defendant corporations, we work to define and then mitigate the exposure from opt-out lawsuits, through clawback provisions and other case-specific strategies. On behalf of institutional investors and other large shareholder plaintiffs, our lawyers can analyze the merits of participating in the class action settlement (or trial) versus the risk and reward considerations of the opt-out path.
On either side of the equation, SFMS capably and zealously asserts the interests of our clients. With offices in California, Florida, New York, Connecticut, New Jersey, Pennsylvania and Wisconsin, our securities law attorneys handle cases nationwide. Contact SFMS to discuss our abilities in opt-out litigations or related matters.