Monitoring Services

SECURITIES LITIGATION MONITORING SERVICES

Donovan Litigation Group, LLC provides Securities Litigation Monitoring Services to institutional and individual investors. The services are an outgrowth of the Securities Litigation Reform Act of 1995, which was intended in part to encourage more participation in securities class actions by institutional investors and large shareholders. Donovan Litigation Group has developed an informational kit and proposal that details the need for and the nature of the services it will provide to such investors. The informational package and proposal are available by filling out the form below.

What are Securities Litigation Monitoring Services?
Why should a fund obtain Securities Litigation Monitoring Services?
What are the risks of not obtaining Securities Litigation Monitoring Services?
Are other funds using Securities Litigiation Monitoring Services?
What are counsel's qualifications and experience in this area?
How will Securities Litigation Services be provided to the fund?
What will the fund's beneficiaries receive from Securities Litigation Monitoring Services?
How much will Securities Litigation Monitoring Services cost the fund?
What happens if the fund chooses to commence, join, or take over a private securities class action?
Are there any other benefits of Securities Litigation Monitoring Services?
What do counsel need from the fund to provide the best possible Securities Litigiation Monitoring Services?
How do counsel and the fund formalize the retention?

WHAT ARE SECURITIES LITIGATION MONITORING SERVICES?

  • An outgrowth of the Private Securities Litigation Reform Act of 1995 ("PSLRA").

  • One purpose of the PSLRA was to encourage institutional investors, such as pension funds, to take a more active role in securities class actions.

  • In many class actions, pension funds and mutual funds have been entitled to the largest shares of class action settlements and have had the greatest financial interest in the successful prosecution of the cases.

  • As long term investors, institutions also have a strong interest in seeing that only meritorious cases are pursued and that dubious cases or settlements are not swallowed-up by exorbitant attorney fee awards.

  • Securities Litigation Monitoring Services are intended to provide an institutional investor with an experienced, organized and efficient means of following existing and potential securities class actions in which the institution could have a significant financial interest. In many instances, the services will cost the institution little or nothing, depending on the nature of the retention and the scope of the services required.
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WHY SHOULD A FUND OBTAIN SECURITIES LITIGATION MONITORING SERVICES?
  • To fulfill the Fund’s fiduciary duties to its beneficiaries and to maximize the portfolio values of the Fund.

  • To ensure that the Fund obtains the largest possible share of money to which it might be entitled in any settlement or recovery in an existing securities litigation.

  • To ensure that the Fund receives timely notice and a claim form in any cases in which it might have an interest so that the Fund can submit a proper claim or determine whether to oppose the settlement or request for attorneys’ fees.

  • To enable the Fund to appear in, object to or support securities cases filed against companies in which the Fund has a financial investment.

  • To protect the Fund against losses that might arise either from adverse events affecting the Fund’s equity positions or from inadequate securities class action settlements.

  • To ensure that companies in which the Fund has a financial investment are responsive and accountable to all investors, including the Fund, which ensures properly functioning capital markets based on the disclosure of complete and accurate information to investors.
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WHAT ARE THE RISKS OF NOT OBTAINING SECURITIES LITIGATION MONITORING SERVICES?
  • The Fund could be subject to criticism from its beneficiaries for failing to protect and preserve the Fund’s assets as aggressively as possible.

  • The Fund could miss out on opportunities to supplement the Fund’s assets and performance by filing timely claims in existing class actions or by asserting the Fund’s interests in controlling certain class action litigation and obtaining the highest possible recovery.

  • The Fund could receive a depleted recovery in certain class actions due to exorbitant attorney fees or other costly terms to which the Fund could have objected if it had timely and properly made its position known.

  • The Fund could be waiving certain of its rights to appear in or object to certain securities cases or to assert its position in mergers that may have a broader impact on the interests of the Fund’s beneficiaries.
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ARE OTHER FUNDS USING SECURITIES LITIGATION MONITORING SERVICES?
  • Yes. Many of the state employee pension funds have retained counsel to monitor securities class actions and to recommend to the funds steps they should take in connection with the cases. In several instances, funds such as CALPERS, the Wisconsin Investment Board, the Florida Public Employees Retirement Plan and the Colorado Public Employees Retirement Fund have appeared in, taken over or initiated and settled securities class actions. Other state and municipal funds, such as New York State, the City of Philadelphia and a variety of smaller municipalities have also solicited proposals from and retained counsel to provide such services.
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WHAT ARE COUNSEL'S QUALIFICATIONS AND EXPERIENCE IN THIS AREA?
  • The lawyers responsible for providing Securities Litigation Monitoring Services each have, on average, over ten years of experience investigating, prosecuting and litigating to conclusion complex securities, commercial, antitrust and consumer class actions nationwide. As detailed in the Firm Biography, Counsel have participated in some of the largest and most important securities, antitrust and consumer class actions in the country.

  • As a small, dynamic and innovative litigation firm, Counsel also have the ability to provide more personalized, concentrated and flexible attention to institutional clients without the risk of conflicts of interest or burdensome overhead costs that are, in the end, passed on to the clients.

  • The Firm is technologically advanced. Counsel rely on the latest Internet data bases and search capabilities, employ sophisticated news and SEC retrieval techniques and keep abreast of market developments on practically a minute-to-minute basis. They have access to numerous financial and accounting experts, who they retain only as needed to assist with evidentiary analysis and case development. They also belong to local, national and specialized bar associations that provide up to date information on case developments, precedents and court dockets.
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HOW WILL SECURITIES LITIGATION SERVICES BE PROVIDED TO THE FUND?
  • Counsel will utilize various online resources, such as Bloomberg Business News, Dow Jones News Service, Internet search engines, the SEC’s EDGAR system and the Securities Class Action Clearinghouse to obtain and monitor up-to-the-minute information about pending or potential securities cases. Counsel will compare that information with information concerning the Fund’s portfolio purchases and holdings to determine whether the Fund might have an interest in any developments. Where the Fund is likely to have an interest, Counsel will provide a brief report and recommendation about the matter, including the options available to the Fund. Counsel will also obtain copies of relevant filings, including Complaints in pending actions and pertinent news releases and SEC filings in potential cases.

  • Once Counsel have determined that the Fund’s interests may be impacted by a pending or potential class action, the case will be reviewed with the Fund so the Fund can make an independent determination whether it is a case in which the Fund should seek court approval to be designated as lead plaintiff. If the Fund determines not to seek to serve as lead plaintiff, Counsel will nevertheless monitor the litigation, including having periodic and regular contact with class counsel, to ensure that the Fund’s interests are protected. In cases where Counsel and the Fund do not believe the claims have merit, or where Counsel and the Fund believe that a settlement is inadequate, Counsel will review the Fund’s options with the Fund to determine an appropriate course of action.
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WHAT WILL THE FUND'S BENEFICIARIES RECEIVE FROM SECURITIES LITIGATION MONITORING SERVICES?
  • The Fund’s beneficiaries will receive improved returns from recoveries in securities class actions in which the Fund may be one of the larger interest holders in the cases.

  • The Fund’s beneficiaries will obtain low cost, efficient and effective legal services, including claim form processing and information gathering, without having to devote internal administrative resources to such activities or to divert Fund management from their primary duties.

  • The Fund’s beneficiaries may obtain larger recoveries on portfolio investments as a result of more active involvement by the Fund in pending or potential securities litigation impacting the Fund’s portfolio.

  • The Fund’s beneficiaries will have the assurance that the Fund is aggressively protecting and monitoring its securities portfolio to maximize recoveries in cases concerning portfolio investments.
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HOW MUCH WILL SECURITIES LITGATION MONITORING SERVICES COST THE FUND?
  • Little or nothing. Counsel view the ability to provide legal services to the Fund as a tremendous opportunity. Counsel are willing to perform legal services for the Fund on a contingent fee basis. Depending on the nature of the Fund’s portfolio, Counsel anticipate that there will be sufficient instances in which the Fund may decide to seek to serve as lead plaintiff or to object to class action settlements that Counsel will be able, in the long term, to receive fair compensation based on contingent fee awards from the recoveries Counsel obtain for the Fund. Of course, where the Fund requires special or extraordinary services from Counsel beyond the scope of contingent fee litigation or standard securities litigation monitoring services, Counsel would expect the Fund to pay for the costs and fees of those services on a timely basis.

  • Counsel also are aware of alternative contingent fee arrangements in which a decreasing percentage of attorneys’ fees are agreed to by the parties depending on the size of the recovery obtained, the advancement of costs or the blending of hourly payments with a contingent fee incentive. Counsel are open to considering each of these alternatives to ensure that the Fund obtains the highest caliber of legal services for the lowest feasible cost.
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WHAT HAPPENS IF THE FUND CHOOSES TO COMMENCE, JOIN OR TAKE OVER A PRIVATE SECURITIES CLASS ACTION?
  • If the Fund, after active and detailed consideration of the facts and issues with Counsel, decided to commence securities litigation either on its own behalf or as a representative of a class, Counsel would represent the Fund in the litigation. With the Fund’s approval, Counsel would retain such co-counsel and experts as may be necessary to prosecute the action effectively and efficiently. Counsel would prepare all the necessary papers and marshal all the relevant documents, including likely discovery materials possessed by the Fund. Counsel would endeavor to minimize any distractions to the Fund that could arise from the litigation. Counsel would keep the Fund apprised of all important developments on a timely basis and present the Fund with all settlement offers and options.

  • If the Fund decided to join or take over an existing securities class action, Counsel would also represent the Fund and would proceed as if the Fund had initiated the action. If the Fund decided to appear in an action for purposes of objecting to a settlement or other development in the action, Counsel would also represent the Fund.
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ARE THERE ANY OTHER BENEFITS OF SECURITIES LITIGATION MONITORING SERVICES?
  • Yes. For example, where successful, the Fund will be able to report to its beneficiaries the tangible results of the securities litigation monitoring services and take credit for maximizing the returns to the Fund. More important, the Fund would also be able to show that it is actively protecting and preserving the Fund’s assets, including its interests in litigation recoveries.
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WHAT DO COUNSEL NEED FROM THE FUND TO PROVIDE THE BEST POSSIBLE SECURITIES LITIGATION MONITORING SERVICES?
  • A retention agreement.

  • A listing of all of the Fund’s investments during the past three years, including the nature of the investment, the date purchased, the price per share or unit paid, the date sold, the price per share or unit received, and the identity of the brokers through whom the trades were executed.

  • A monthly or other periodic listing of securities transactions, perhaps in the form of the Fund’s investment account statements.

  • An administrative liaison with whom Counsel could speak about information and a supervisory contact to whom Counsel could direct reports and recommendations.
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HOW DO COUNSEL AND THE FUND FORMALIZE THE RETENTION?
  • Counsel will provide the Fund with a written form of retainer agreement. The Fund will not be required to pay any upfront retainer or to commit itself to paying any such retainer in the future.
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