Many investment firms have the trade data needed to participate in securities class and collective actions, but often do not fully use it. This overlooked data is a real opportunity to boost returns beyond traditional investments. In our "Unleash the Hidden Power of Your Existing Data" webinar, our panel of experts discussed practical ways to turn trade records into valuable assets for global damage analysis and recoveries. The discussion covered how effective data management and a strong understanding of financial markets, rather than just legal know-how, are essential for making the most of these opportunities.
Building a Solid Data Foundation
One of the main challenges to successful recoveries is fragmented data. When trade data is scattered across different systems and custodians, or stored in inconsistent formats, it鈥檚 easy for errors and missed claims to occur. Setting up a single, organized source for all trade data is the first step toward a successful recovery program.
Centralizing your records, ideally with at least a decade of history, makes it much easier to check for eligibility in global cases and reduces human error. Identifying where your data is stored, whether with a fund administrator or custodian, and ensuring an efficient process to share data with your securities class action (SCA) expert is crucial. This approach is especially important in a field where current settlement payouts are estimated between $13-$15 billion.
How to Choose the Right SCA Vendor
After a class action settles, the process shifts from legal work to expertise in financial data handling. Picking the right vendor can make a significant difference in your ability to recover funds. Instead of focusing only on filing services, it鈥檚 worth looking at a vendor鈥檚 experience with financial products and data analysis.
Consider these key factors:
- Proven Results: What is the vendor's market share and claim rejection rate? A lower rejection rate means better accuracy.
- Specialization: Does the vendor focus solely on securities class actions, or do they cover many services? A dedicated team is more likely to bring specialized knowledge.
- Global Reach: Will the vendor handle cases outside the U.S.? International recoveries have grown rapidly since 2022 and offer new opportunities.
- Accuracy in Payouts: Does the vendor recalculate and verify loss and participation amounts, or simply accept what is provided?
Using Automation to Improve Outcomes
With reliable data and the right partner, automation can transform the filing process. Manually checking trade records for every new case is not only time-consuming, but also increases the risk of missed opportunities. Advanced vendors now use data integration and automated systems to identify eligible cases鈥攅ven those in less visible international markets. Top vendors also review the process to ensure every claim is accurate and complete.
The actual value of claims depends on how well loss calculations are done. Calculating losses with the right methodology, in line with each case鈥檚 requirements and accounting for any limitations or exclusions, ensures firms receive fair payouts. Reliable vendors will challenge or appeal any incorrect payout figures to help firms recover the maximum possible amount.
The Value of Looking Beyond the U.S.
While recoveries in the U.S. remain strong, with $5.2 billion paid out in 2024, international cases represent a growing field that many firms overlook. By expanding their focus to markets like Australia, the Netherlands and the U.K., investors can tap into additional recovery opportunities. Working with a vendor that understands these foreign markets is key to success.
By organizing trade data, working with skilled partners and embracing automation, investment firms can turn the operational process of securities class action filings into a reliable way to recover capital that might otherwise be left on the table.
Watch the "Unleash the Hidden Power of Your Existing Data" webinar to learn more about how leveraging technology and strategic partnerships can streamline securities class action recovery efforts.
