Class action lawsuits yield more than USD 16 million in 2006

Almost 15 million of this sum from participation in class action against WorldCom 

After the announcement in June 2006 that class-action litigation against WorldCom would lead to the first distribution of settlement funds, a total of close to USD 15 million was received in the last week of 2006. This is by far the largest payment made to date, with further payments expected in 2007. Welcome earnings indeed for our clients.

When class action is taken, a group of shareholders holds a company liable for financial damage suffered as a result of the activities of that company or its board of directors. Generally, the type of situation concerned is one where shareholders consider a company to have withheld information that would have been essential to their investment decisions. Class action is based on the opinion of investors who believe that they have suffered damage because information that they should have received was withheld. Class action is an attempt to recover part or all of such damage. 

In 2006, thirteen class-action suits brought in a total of more than USD 16 million. Up to December 2006 the largest single result of class action was USD 342.000 from the class action against Lucent Technologies.

In cooperation with Legal Affairs portfolio managers ultimately decide if funds should participate in class-action litigation. The administrative and settlement work involved in class action was handled by the Financial Service Center (formerly ‘Robeco Fund Administration Services’) in 2003. Robeco has the support of the law firm Sturman LLC.