The stakes for institutional investors that fail to file claims in securities class action settlements just got much higher.
During the week of Jan. 10, more than 40 mutual fund managers were sued by investors alleging that the funds failed to collect as much as $2 billion in settlement payouts to which the funds were entitled, according to news reports. The class-action lawsuits allege that the funds' failure to claim this money in the past three years was a breach of fiduciary duty, negligence, and in violation of the Investment Company Act of 1940. The lawsuits seek compensatory damages for all of the money that the mutual funds allegedly left on the table, as well as punitive damages and the forfeiture of all commissions and fees paid by fund shareholders.
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