Chicago Clearing Corporation (CCC), the leader in securities and financial class action settlement recovery, and Brian Blockovich, our President and General Counsel, were recently featured in Citywire RIA, a journal dedicated to helping asset managers and financial advisers "make better investments."
More and more, savvy advisors and institutional investors are turning to CCC for its expertise and its painless, turn-key solution. Read the article below to find out why claim filing is a must, and how recent years have seen record-setting numbers in the financial class action industry. (The article is also available at this link; log-in required.)
Class action for clients: RIAs add claim filing to list of capabilities
While the process of filing class action claims is often burdensome, some RIAs are contracting with third parties to provide this service for clients.
As RIA firms grow, they have routinely sought to add coveted services like accounting and estate planning.
But at one growing South Carolina RIA, a different boutique service has entered the conversation.
‘We’ve acquired some practices that have used a class action claim-filing service,’ said Mike Herman, chief compliance officer at $3.4bn RIA Apollon Wealth Management, which is based near Charleston, S.C. ‘I’ve seen maybe a half-dozen firms that went out on their own and hired a filing service. Most advisors would typically say it’s up to clients to file on their own.’
Coming off a record-setting year in class action settlements, Apollon is hardly the only RIA that has contracted an outside service provider to file class action claims.
The $16.2bn Indianapolis-based Sanctuary Wealth and $2.5bn Palm Beach Gardens, Fla.-based Dakota Wealth are among the RIAs that have disclosed relationships with such service providers this year, according to filings with the Securities and Exchange Commission (SEC). Service providers like Chicago Clearing Corporation and Broadridge Financial Solutions are two firms these RIAs have listed.
Leaving aside the Big Tobacco cases nearly 20 years ago, last year saw ‘the most extensive set of billion-dollar class action settlements in the history of the American court system,’ according to the January Class Action Review report from the law firm Duane Morris.
In all, there were 15 class action suits that resolved cases for at least $1bn, with a total value of nearly $63.7bn in settlement money, per the report.
Last year, the number of settled securities-related class actions reached its highest level in 15 years, according to a report from consulting firm Cornerstone Research. The 105 securities cases observed by Cornerstone was a 21% increase from 2021, with median settlement amounts also rising ‘dramatically,’ the firm found.
‘In the cases of widely held stocks, chances are, RIA clients are invested,’ said Brian Blockovich, president and general counsel of Chicago Clearing Corporation, a claim filing service that works with RIAs. ‘Certainly in the last five to 10 years, RIAs have learned this is a possibility and this service is something clients could be interested in.’
Advisors often get calls from clients about notable cases, Blockovich also said. Citing an example, he pointed to an ongoing case against Facebook parent company Meta, which settled a claim alleging that the company used IP addresses to track users’ locations despite some users turning off location services.
Through its agreement with Apollon, Chicago Clearing charges end clients a contingency fee totaling 12.5% of each claim, deducted at the time of payment, according to the RIA’s regulatory disclosures. Working with class action securities claims specifically, Chicago Clearing monitors settlements, files paperwork and manages distribution of the award itself, Apollon disclosed.
The RIA this year started to roll out the service firmwide, with just one client choosing to opt out thus far, Herman said. He added that an integration with Orion gives the class action services specialist access to client transaction data.
‘If you think about class action claims, clients don’t often want to deal with them because they’re difficult, there’s a lot of information they need to research,’ Herman said. ‘This is one of those value-added services that advisors are bringing on.’
There are a few things he said RIAs should keep in mind when finding a service provider.
‘Some of the factors include how frequently they’re assessing transaction activity for claims, and how they gain access to that activity,’ Herman added. ‘Also consider the experience of their team and how dedicated they are to providing class action claims, compared to other services.’
Case Name: Read More
Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, MDL 1720
Case Name 1: The Kraft Heinz Company
Cornerstone Research has released its yearly securities
class action litigation report and found dramatic increases in the number of
settlements and in the average settlement pools. (The link to the full report
Cornerstone focused on federal securities class actions, specifically cases al... Read More
“I could go on and on, but bottom line, the fees being charged are much less than what I was spending in house to file and this is just one less thing I have to spend time trying to figure out how to complete on a consistent basis. Dealing with the CCC staff has been a very positive thing.”
“We were spending countless hours on class action claims before we signed on with CCC in January. Matt Murray and their technical team ensured our data transmission was seamless and secure. We found everyone at CCC to be professional, courteous, and accommodating.”
“Signing with CCC has made a huge difference. Before, it was horrible. We had to print thousands of pieces of paper, invite clients to come in and sit down with us to show them where to find the transactions, how to input them into the Proof of Claim forms. Now it's simple. It’s very nice to be able to tell our client, “You can shred that Proof of Claim form because CCC has it taken care of.”
Registered Investment Advisor
“Your client reporting portal and customer service is the reason we chose Chicago Clearing. I send the data on an annual basis to CCC and they take it from there. My clients are protected (if there is a class action, it is getting filed), the Bank is protected (we are meeting our fiduciary obligation by filing the claims)."