Securities Litigation—Trends and Strategies

Challenging economic times for a business can shed light on prior corporate misconduct. In 2020, there were multiple examples of corporate fraud exposed. As litigation related to insolvencies and fraud grows, institutional investors should be seeking out new strategies to ensure maximum possible recoveries.

Burford Capital explains that the Wirecard litigation, which took place in Germany, is an excellent example of how experienced funders can improve case outcomes. Burford worked closely with law firm Quinn Emanuel. Together, the team built the largest shareholder group action against the financial tech firm, and will continue to maximize recovery for their clients. The Economist suggests that as much as a decade’s worth of fraud will soon be exposed. 

Securities litigation is about to happen on a scale we haven’t seen since the 2008 financial unrest. This is sure to include jurisdictions that are new to large-scale securities activity. This means institutional investors may find themselves seeking guidance from experienced industry partners that offer insight, as well as funding.

The impact of COVID may be changing over time. It remains uncertain when a new normalcy will emerge, and what it will look like when it does. With that in mind, developing a strategic litigation plan should be at the forefront of every GC’s mind over the coming year and beyond.

What should that plan entail? Burford Capital recommends portfolio financing to preserve assets and mitigate risk. A portfolio funding arrangement allows fund managers to pursue multiple claims by streamlining processes and lowering costs overall. Monetizing claims is another way legal funding can be employed to free up working capital that may be needed for day-to-day operations.

A sizable part of weathering financial uncertainty is to plan and adapt for the future.