Major Investors Opt Out of Class Actions, Pursue Larger Recoveries
From the desk of Jim Eccleston at Eccleston Law
Large shareholders increasingly are choosing to opt out of class-action settlements, a trend that has gained momentum since a pivotal US Supreme Court ruling altered the landscape.
According to a Cornerstone Research report, a notable spike in settlements featuring opt-outs from 2019 to the first half of 2022 has disrupted a previously gradual 12-year trajectory. The report reveals that investors pursued individual or direct actions in about a third of these recent settling cases with opt-outs. Notably, a recent lawsuit against Boeing Co. over statements regarding the safety of its 737 Max aircraft reflects this emerging trend.
According to Bloomberg Law, this shift in opting out is particularly pronounced in pension funds and other institutional investors cases. These cases often involve defendants with more significant financial capacity for settlements or judgments and feature more intricate allegations compared to cases without opt-outs.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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