Why funds opt out of class action.

Pensions & Investments, February, 2006 by Selinger, Neil L.

Byline: Neil L. Selinger Historically, in the wake of corporate fraud, most investors have sought to recoup their losses by filing a claim in the settlement of a class-action lawsuit. Although this passive approach minimizes an investor's expenditure of time and effort on the matter, there is increasing evidence that allowing someone else to shoulder the risks and run the case is not the best way in high-profile frauds for pension fund trustees to recoup their funds' losses.

A new trend is coming into play with institutional investors finding more reasons to opt out of classes and go their own way. While still not a common occurrence in securities fraud cases, opting out is becoming a viable alternative, worthy of conscientious board members' consideration....

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