Netherlands Offers Jurisdiction To Class Actions Securities Cases for US Citizens and Others Who Cannot Obtain Redress Domestically
Ever since the US Supreme Court ruled in Morrison et al v National Australia Bank Ltd et al that claimants not residing in the United States or American citizens who purchased shares on a foreign exchange can’t settle or litigate their case in the US, these parties have been seeking other jurisdictions to get their claims resolved. Recently, the Netherlands has stepped in to provide this needed alternative.
It was earlier this year that the Amsterdam Court of Appeal accepted jurisdiction to preside over a class action securities settlement involving Zurich Financial Services (ZFS) subsidiary Converium Holding shares. The involvement of Dutch shareholders' association VEB and Stichting Converium Securities Compensation Foundation was enough for court jurisdiction to be granted even though not a lot of the class members reside in the Netherlands. (The appeals court used the Dutch Act on the Collective Settlement of Mass Claims to grant jurisdiction). As a result, about 10,000 institutional and individual investors who sustained financial losses when they invested in Converium stock outside the US were able to share $58.4 million, minus legal fees.
There was a class action settlement that was declared in the US that awarded $84.6 million to a smaller group of class members. However, only US persons and those that bought their Converium securities on any exchange were allowed to participate in the class, which was certified by the United States District Court for the Southern District of New York.
Part of the appeal of offered by the jurisdiction in the Netherlands is that it is in a country that is part of the EU. This means that class action settlement in the Converium case is recognized not only throughout the union but also outside. Also, compared to other jurisdictions in Europe the Netherlands still offers the broadest collective action-type remedies.
However, according to Dutch lawyers, it is important to note that the legislation applied in these lawsuits isn’t for those seeking collective or class action litigation, but rather, it is for parties that already reached a settlement and want it made binding. The legal declaration blocks the way for any appeals. (It is not clear at this time whether more securities fraud law firms will turn to the Netherlands to resolve their clients’ lawsuits.)
Our securities fraud lawyers at Shepherd Smith Edwards and Kantas, LTD LLP represent not just institutional and individual investors in the US, but also investors outside the country with claims against US-based investment firms. Contact our stockbroker fraud law firm to request your free case evaluation. Your first consultation with us is free. Over the years, we have helped thousands of investors recoup their losses.
Class actions go Dutch, The Lawyer, March 26, 2012
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Investors in Oppenheimer Mutual Funds Considering Opting Out of $100M Class Action Settlement Have Until August 31, Institutional Investor Securities Blog, August 31, 2011
Texas Securities Fraud: State Law Class Action in R. Allen Stanford’s Ponzi Scam Not Barred by SLUSA, Stockbroker Fraud Blog, March 28, 2012