Institutional Investors as Lead Plaintiffs

Institutional investors, such as public pension funds, are required to consider serving as Lead Plaintiffs in federal securities class actions and are ideally suited to do so. The U.S. Department of Labor takes the position that a public pension fund has an affirmative duty to consider whether it would be in the best interest of the plan to serve as lead plaintiff of the class where the plan has incurred losses in the stock at issue. One of the reasons for this is the dramatically positive impact the plan’s involvement could have on the size of each participant’s ultimate recovery. To be sure, a study conducted in 2003 by PriceWaterhouseCoopers showed that recoveries in federal securities class actions were, at that time, on average sixteen times greater where the lead plaintiff is an institutional investor, as opposed to an individual shareholder. Milberg's portfolio monitoring program enables trustees to thoroughly consider the options available to the plan when faced with substantial losses attributable to securities fraud.