Mutual Funds Should Consider Shareholder Litigation

In an expert analysis column published by Law360, Partner Serena Hallowell and Associates Alec Coquin and Jake Bissell-Linsk responded to an article published by two defense attorneys that attempts to dissuade mutual funds from engaging in shareholder litigation.

According to Hallowell, Coquin, and Bissell-Linsk, mutual funds are "paradigmatic examples of the sophisticated institutional investors that Congress envisioned serving as lead plaintiffs when passing the Private Securities Litigation Reform Act of 1995." Additionally, the article argues that the benefits of participating in shareholder litigation, including maximizing "the value of recovery by supervising the litigation and selecting counsel that they know will vigorously prosecute the action," far outweigh the minimal burden that discovery may impose on lead plaintiffs.

Finally, the authors suggest that "litigants take a thoughtful approach to deciding which form of engagement is best in each case," which is why "mutual funds would benefit from fostering relationships with plaintiffs counsel, who can work with them to ensure those funds are appropriately balancing their litigation risk and reward."

Read the full article here.