At Foley’s sixth annual National Directors Institute on March 8, 2007 in Chicago, “Why Do Institutional Shareholders Sue You?” was a featured session moderated by Nancy Sennett, partner Foley & Lardner LLP. Panelists included Phillip Angelides, former California State Treasurer and Trustee of CalPERS and CalSTRS; Jane Hamblen, chief legal counsel, State of Wisconsin Investment Board; Darren Robbins, Lerach Coughlin Stoia Geller Rudman & Robbins, LLP; and Steve Shappell, managing director, Aon Corporation.
The panel discussion focused on the role of institutional shareholders in securities class action litigation. Due to the enactment of the Private Securities Litigation Reform Act (PSLRA) in 1995, institutional shareholders are far more active in litigation than they were prior to the change in the law. The panel’s discussion included changes in the way that the cases are prosecuted; why and how institutional shareholders step into their roles as lead class action plaintiffs against corporations; what corporations should do to minimize the risk of litigation; the rising trend of institutional shareholders deciding to opt out of shareholder class actions; the increase in the number of derivative actions; and the rise of actions filed upon merger and acquisition announcements by large corporations.
